August 27 , 2021 - Emily Makings

Seattle’s tax revenues decreased by 7.5% in 2020, but taxes and other revenues are expected to rebound in 2021

According to the Seattle City Budget Office last week, the city’s revenue forecast has improved since the city budget was adopted last year. That is the case even before factoring in federal relief funds or revenues from the new payroll expense tax. The city’s 2021 budget was based on revenue forecasts from last November. Since […]

August 17 , 2021 - Emily Makings

“Awash with money”

Earlier this month, Jason Mercier of the Washington Policy Center posted a March 26 memo from Rep. Chopp that set out the Legislature’s options for a capital gains tax. For each of the options, Rep. Chopp listed among the cons that legislators could be “attacked for raising taxes while state is ‘awash with money.’” Indeed, […]

July 29 , 2021 - Emily Makings

State tax revenue since the pre-Great Recession peak has grown by more in Washington than in any other state

According to the Urban Institute’s Tax Policy Center, state tax revenue in Washington grew by 13.9% from the fourth quarter of 2019 to the fourth quarter of 2020. That was the fourth highest growth in the country, and well above the average growth in the U.S. of 6.0%. Comparing the pandemic period of April–December 2020 […]

July 15 , 2021 - Emily Makings

Trajectory of state property tax growth has dramatically changed

Washington’s three top tax sources are the sales tax, business and occupation (B&O) tax, and property tax. In fiscal year 2020, of total state tax collections, the retail sales tax accounted for 42.3%, the B&O tax 17.3%, and the state property tax 13.3%. The chart shows the growth in revenues from FY 2000 from each […]

June 29 , 2021 - Emily Makings

With the June revenue forecast, the rainy day fund balance will increase (but by less than it would if capital gains tax collections were not directed to a dedicated account)

Constitutionally required deposits to Washington’s rainy day fund (the budget stabilization account, or BSA) are based on “general state revenues.” General state revenues (GSR) are defined in Art. VIII, sec. 1 of the state constitution. Essentially, they are funds deposited in the general fund–state (with some exceptions). Under Art. VII, sec. 12, 1% of GSR […]

June 22 , 2021 - Emily Makings

The capital gains tax and funding for school construction

The capital gains tax bill (ESSB 5096) specifies that the first $500 million of tax collections each year will be deposited in the education legacy trust account (ELTA) and any remainder each year will be deposited in the common school construction account (CSCA). (The amount deposited in the ELTA will be adjusted by inflation each […]

June 17 , 2021 - Emily Makings

How high will the long-term care payroll tax need to be to maintain solvency?

Geekwire ran an item earlier this week about the state’s impending payroll tax to fund long-term care (LTC) benefits. The program was enacted in 2019, the tax will begin to be collected Jan. 1, 2022, and benefits will be available beginning Jan. 1, 2025. We wrote about the program in a 2019 policy brief. The […]

May 24 , 2021 - Emily Makings

A new phone tax to fund the 988 behavioral health hotline

This session, the Legislature imposed a new tax on telephone lines. Collections will fund the statewide 988 behavioral health crisis response hotline. In legislation enacted last year, Congress made 988 “the universal telephone number within the United States for the purpose of the national suicide prevention and mental health crisis hotline system.” E2SHB 1477 imposes […]

May 14 , 2021 - Emily Makings

Tax cuts and the coronavirus state and local fiscal recovery funds

The U.S. Department of the Treasury’s interim final rule for the coronavirus state and local fiscal recovery funds discusses allowable uses of the funds (see here and here). It also details what the funds may not be used for. Jurisdictions may not use the money to make contributions to rainy day funds or to make […]

May 03 , 2021 - Kriss Sjoblom

Capital gains bill passed

When I last wrote about the capital gains tax, the House Finance Committee had just passed an amended version of the Senate-passed bill. On April 21, the House passed the Finance Committee version. On April 22, the Senate declined to concur with the House’s amendments. A conference committee was then named, and that committee crafted […]