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Capital gains realizations by high earners in Washington decreased by more than in other states in 2023

As I wrote on Friday, the taxpayer migration and Statistics of Income data sets from the Internal Revenue Service (IRS) now incorporate the first few years of Washington’s capital gains tax. Although there is not yet much history, the data suggest that Washington residents may have moved or otherwise altered their behavior in response to […]

The adjusted gross income of Washington millionaires declined in 2022 and 2023

Yesterday I reviewed the economics literature on the question of whether wealthy people move in response to tax increases. It’s an important question because the revenue impact of the new income tax is uncertain. The extent to which people (and their incomes) move out of state will have implications for the state budget. Unfortunately, there’s […]

Potential behavioral responses to the income tax

With the income tax, Washington’s tax structure will become more volatile—especially because it is targeted at taxpayers with income over $1 million. The volatility makes it a difficult tax to forecast in general; for Washington, it will be especially hard to forecast in the beginning as it is a brand new tax. When it is […]

State budgets regularly appropriate more than the revenue forecast

The root cause of the state budget shortfall is that in 2023–25, spending from funds subject to the outlook (NGFO) exceeded revenues by $4.842 billion. Budgets adopted for 2025–27 have not narrowed the gap. (Budgets have still balanced by using one-time funds, including reserves and transfers from other accounts.) The gap was not the result […]

Fiscal notes and the income tax

When estimating the fiscal impact of a policy proposal, a key component is the baseline. To what is the new policy being compared? What revenues are expected under existing law, and how would the proposal change that? When agencies prepare fiscal notes during a legislative session, they all use the November revenue forecast as the […]

Workers’ compensation benefit costs are highest in Washington

Washington’s workers’ compensation benefit costs per covered worker remain the highest in the country, according to new data from the National Academy of Social Insurance (NASI). NASI’s August 2026 report covers data from 2023. In 2023, benefit costs in Washington were $875.41 per covered worker, up from $854.31 in 2022 (as revised). The next highest […]

Washington’s state and local taxes and spending per capita ranked 13th highest among the states in 2024

The U.S. Census Bureau recently released state and local fiscal data for fiscal year 2024. This is the best source of data to use for comparisons of taxes and spending across states. To make those comparisons, we adjust the data by population and by personal income. State and local taxes per capita in Washington grew […]

Challenges to public investment impact disclosures

This fall, voters will consider I-645, which would repeal the income tax. Under a 2022 law, a public investment impact disclosure (PIID) will appear in the middle of the ballot title for I-645. The PIID has drawn two challenges. Under current law, any ballot measure that makes a change to a tax or fee and […]

Notes from the first meeting of the new committee on budget transparency and fiscal sustainability

The Joint Legislative-Executive Committee on Budget Transparency and Fiscal Sustainability—created in the 2026 supplemental budget—met for the first time on Monday. The state has contracted with Pew to support the committee and provide research on budget practices in Washington and other states. The meeting included a good staff presentation on the budget, including discussions of […]

New report: 2026 Fiscal Management Performance Review

The Washington Research Council considers budget sustainability to be a primary objective of state fiscal policy and key to our state’s fiscal health, the certainty of government services, and the competitiveness of Washington’s economy. This new periodic review of the state’s fiscal performance will evaluate Washington’s operating budget on multiple factors, including Spending Growth Sustainability, […]