Month: April 2025

Bills would increase capital gains tax and estate tax rates

Increases to the capital gains tax and estate tax rates are included in the new tax package proposed by House and Senate Democrats. (I wrote about their B&O and sales tax proposals earlier.) SB 5813 and HB 2082 are identical; fiscal notes are not yet available. Capital Gains Tax The current capital gains tax rate […]

Sales tax proposal would apply the sales tax to more services (and includes a budget gimmick)

The new tax package proposed by House and Senate Democrats this week includes SB 5814 and the identical HB 2083. The bills would subject more services to the sales tax and more products to the other tobacco products tax. They would also require businesses to make a one-time prepayment of sales tax collections. (Fiscal notes […]

B&O tax proposal would permanently increase tax rates and impose a temporary surcharge

Several new tax bills have been introduced in the Legislature this week. PSSB 5815 and HB 2081 would increase business and occupation (B&O) tax rates. Taxes paid by Washington businesses are already the 10th highest in the country on a per-employee basis, and Washington businesses already pay about half of all state and local taxes. […]

Higher education funding would stay about the same in 2025–27 budgets, despite major tax increase proposals

In legislative testimony and a Substack piece, UW economist Jacob Vigdor has suggested that Washington needs a wealth tax so that it can increase funding for higher education. This premise is belied by the House- and Senate-passed budgets. (I wrote about Vigdor’s taxation points yesterday.) First, regarding poor educational outcomes in Washington, Vigdor writes, Any […]

Washington is not a low tax state, and our fiscal system is more progressive than you think

University of Washington economist Jacob Vigdor writes (of Washington), “We don’t spend very much because, in the grand scheme of things, we don’t tax very much. In a recent analysis by the Federal Reserve Bank of Minneapolis, Washington ranked 48th in terms of the net state and local tax rate.” This is the paper he […]

Savings included in the Senate- and House-passed budgets represent about 4% of the 2025–27 maintenance level

Yesterday I wrote about the new policy increases included in the Senate- and House-passed operating budgets. The increases for 2025–27 ($4.680 billion in the Senate and $4.124 billion in the House) would be offset partially by policy reductions ($3.045 billion in the Senate and $3.210 billion in the House). (The numbers in this post are […]

Compensation accounts for over 40% of the proposed increases in the Senate- and House-Passed operating budgets

Both the Senate- and House-passed operating budgets for 2025–27 would increase appropriations from funds subject to the outlook (NGFO) above the maintenance level. The maintenance level (the cost of continuing current services, adjusted for inflation and enrollment) is estimated to be $76.840 billion. The Senate would make policy level reductions of $3.045 billion and add […]

Should the state use the LEOFF surplus to help close the shortfall, use it to fund new PERS and TRS pension benefits, or hide it?

The state is sitting on a large surplus in the Law Enforcement Officers’ and Fire Fighters’ (LEOFF) Retirement System Plan 1. The various budget proposals differ in how they would use it. LEOFF 1 has been closed to new members since 1977 and only three members are still working. As of June 30, 2023, it […]

Senate- and House-passed operating budgets move away from each other

The Senate and House have each passed their separate operating budget proposals. They do not differ significantly from the versions proposed by the committee chairs. (For more on the original proposals, see our side-by-side.) The Senate-passed operating budget for 2025–27 would appropriate $78.475 billion from funds subject to the outlook (NGFO). That is $5.3 million […]