Emily Makings

Potential increases to the capital gains tax rate could increase revenues by over 30%

Last month, several revenue options being discussed by the Senate Democratic Caucus (SDC) were made public. One of the ideas is to increase the capital gains tax rate. (I’ve previously written about their ideas for business and occupation tax increases, a payroll tax, and a wealth tax.) Under current law, the capital gains tax rate […]

Beware the revenue estimates for proposed wealth taxes

Former Gov. Inslee proposed a wealth tax as part of his 2025–27 operating budget proposal, along with business and occupation (B&O) tax increases. Similarly, revenue options from the Senate Democratic Caucus that were made public last month include two versions of a wealth tax. (For previous posts on the revenue options, see here and here.) […]

Taxes paid by businesses in Washington are the 10th highest in the nation, on a per-employee basis

According to the Council on State Taxation (COST), Washington businesses paid $10,100 in state and local taxes per employee in fiscal year 2023, the 10th highest amount among the states. (Note that the states with the four highest per-employee taxes paid by business are Alaska, New Mexico, North Dakota, and Wyoming—all resource extraction states that […]

Budget savings directive from Gov. Ferguson would not reduce the maintenance level for 2025–27

Earlier this month, Gov. Ferguson released a budget priorities document that called for across-the-board spending cuts. This sounded like a promising way to start to close the operating budget shortfall. However, the document did not specify the spending level from which the reductions would be made. When I wrote about Gov. Ferguson’s proposal, I assumed […]

A potential state payroll tax would increase business taxes by 46%

Some revenue options being considered by the Senate Democratic Caucus (SDC) were made public last month. (I wrote earlier about their business and occupation tax ideas.) The largest tax on employers on their list is a payroll tax of 6.2%. The tax would be paid by employers on the total compensation “paid to employees making […]

Inslee, Senate Democratic Caucus revenue ideas would significantly increase B&O taxes

Even though legislative spending choices are the cause of the projected operating budget problem, former Gov. Inslee proposed major new tax increases as part of his 2025–27 operating budget proposal. Similarly, several “revenue options” from the Senate Democratic Caucus (SDC) were made public last month. These proposals would significantly increase business taxes. Businesses already pay […]

The size of the budget shortfall is in the eye of the beholder

Last week KIRO Newsradio called the size of the budget shortfall a “mystery.” Indeed, there is a wide range of estimates floating around: As I wrote last month, the size of the four-year shortfall depends on your assumptions about spending and revenues. The shortfall is the difference between forecasted resources and the projected cost of […]

Stop judging K–12 funding by its share of the state budget

Last week, Superintendent of Public Instruction Reykdal said that the state should make it a goal to direct 50% of the state budget to K–12. In 2019–21, K–12 made up 51.6% of spending from funds subject to the outlook (NGFO). In 2023–25, K–12 accounts for 43.4% of NGFO appropriations. Policymakers and others from both sides […]

For 2023–25, Legislature increased spending by 15.8% even though they expected revenues to increase by just 3.5%

As we wrote in our report on the causes of the projected budget shortfall, the Legislature adopted appropriations for 2023–25 that greatly exceeded expected revenues. Appropriations for 2023–25 are 15.8% higher than 2021–23 spending. At the time this appropriations level was adopted, revenues were expected to be just 3.5% higher in 2023–25 than in 2021–23. […]

Gov.-elect Ferguson’s savings proposals would begin to bring appropriations back in line with expected revenue

As I wrote on Friday, Gov.-elect Ferguson’s budget proposal is thin on details. Importantly, though, he argues that the first course of action is to reduce spending: “I am focused on identifying opportunities for savings first and will only focus on revenue after we have scrubbed the budget for savings and reductions.” Indeed, as we […]