Blog

February report on state tax collections: revenues for the most recent month exceeded forecast by $5 million

Yesterday the state’s Economic and Revenue Forecast Council (ERFC) issued its monthly report on general fund revenue collections. This report covers payments received between January 11 and February 10 for the sales tax, the use tax, the business and occupation tax, the public utility tax, the tobacco products tax, and penalties and interest (collectively the […]

The current wealth tax proposal would apply to financial assets over $250 million, down from $1 billion in the 2021 version

The wealth tax bills proposed in the Legislature this year (HB 1473 and SB 5486) are very similar to the 2021 proposals (which Kriss described here). A major difference is a dramatic increase in the amount of financial assets that would be subject to the tax. HB 1473 (which was heard by the House Finance […]

Estate tax bill would double the maximum rate to fund “progressive policies,” but the funding would dry up by 2035

The current rates for Washington’s estate tax range from 10% to 20%. That top rate is tied with Hawaii for the highest state estate tax rate in the country. (The exclusion amount in Washington is just $2.2 million, compared to $5.5 million in Hawaii.) HB 1795, which was heard by the House Finance Committee this […]

Should school salary inflationary adjustments be based on estimates of future or past inflation?

HB 1732 and SB 5650 would both specify an inflationary adjustment for school employees for school year (SY) 2023–24 of 3.8%. Additionally, under current law, the inflationary adjustment is the implicit price deflator (IPD) for the fiscal year (FY). Under the bills, beginning in SY 2024–25, the adjustment would be based on IPD for the […]

HB 1628 would increase the maximum REET rate to fund affordable housing—but how much would go to which accounts?

Until 2020, the real estate excise tax (REET) was a flat 1.28% tax on the selling price of real estate. In 2019, the Legislature graduated the rate, which reduced the rate for some taxpayers and increased it for others. (We wrote about the change in this policy brief.) Under current law, the maximum rate is […]

Meaningful reviews of state spending over time do not present spending only as a share of personal income

SSB 5082 would repeal the non-binding advisory votes on tax increases that have been on ballots since 2012. It would also require voters’ pamphlets to include a link to a website that provides specified budgetary information. This appears to be a nod to transparency and a sop to voters—who put the advisory votes in place […]

Bill would use a portion of estate tax collections to fund the developmental disabilities community services account

SB 5099 would deposit “extraordinary” estate tax revenues into the developmental disabilities community services account (DDCSA) instead of the education legacy trust account (ELTA). The DDCSA was created in 2005 and may be used for “supports and services in a community setting to benefit eligible persons with intellectual and developmental disabilities.” It is currently funded […]

Gov. Inslee’s bond proposals would increase debt service costs above the maximum level recommended by the treasurer, reversing a long-term trend

The state treasurer, in the 2023 Debt and Credit Analysis report, recommends that Washington keep annual various purpose general obligation (VP GO) debt service costs under 5% of general state revenues (GSR). (Generally, these debt service costs are paid out of the operating budget.) Debt service costs were below 5% of GSR in 2021 and […]

With GFS funds, paid family and medical leave premium rate could decrease to 0.76% next year

Two weeks ago, the Senate Committee on Labor & Commerce approved SSB 5286, which would make changes to the paid family and medical leave (PFML) program premium rate structure. As I noted at the time, in the near term, premium rates under the bill would be higher than expected under current law in order to […]

Gov. Inslee’s budget would balance over four years, but total reserves at the end of 2025–27 would be just $2.411 billion

Yesterday the Economic and Revenue Forecast Council (ERFC) adopted an official budget outlook based on Gov. Inslee’s operating budget proposal. It estimates that the budget would leave an unrestricted ending balance in funds subject to the outlook (NGFO) of $275 million over four years. But there is uncertainty about the economy and the constitutionality of […]