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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 […]

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 […]

What to make of the high capital gains tax collections for tax year 2025?

The Department of Revenue reported last month that capital gains tax collections for tax year 2025, which were collected in April and May 2026, totaled over $1.5 billion. (This is not the final number. All taxpayers must submit estimated payments in April, but taxpayers with filing extensions will finalize their payments in October 2026.) According […]

Happy Fiscal New Year!

Today is the first day of fiscal year 2027, which is the second year of the 2025–27 biennium. Washington’s current budget troubles are the direct result of the Legislature appropriating significantly more than was expected in revenues in 2023–25. Ultimately, actual spending from funds subject to the outlook (NGFO) in that biennium exceeded ongoing NGFO […]

New brief: With the Income Tax, Washington Adds a New, Volatile Layer of Taxation

Under ESSB 6346, a 9.9% tax will be imposed on Washington income over $1 million beginning Jan. 1, 2028. All the provisions in the bill, including the tax rate and the $1 million standard deduction, are statutory, so they could be changed by the Legislature at any time. The determination of taxable income begins with […]

Budget-related lawsuits piling up

The Washington State Standard reports that two assisted living organizations are suing the state over the way the Legislature reduced assisted living facility rates this year. The 2026 supplemental operating budget (Sec. 938) delays a scheduled rate rebase from FY 2027 to FY 2028. This is estimated to reduce spending from funds subject to the […]

Who pays the advanced computing surcharge?

The workforce education investment account (WEIA), created in 2019 and overhauled in 2020, is a fund subject to the outlook. Revenues may be used for “higher education programs, higher education operations, higher education compensation, state-funded student aid programs, and workforce development including career connected learning.” Certain business and occupation (B&O) tax dollars fund the WEIA. […]

The budget problem and the income tax

In the Seattle Times today, Paul Roberts writes about the downward revisions to Washington’s credit outlook. The credit rating agencies cited the recent trend of spending outpacing revenues and the use of reserves to balance the budget. According to the Times, Democratic state lawmakers, who control the state budget process, say they’re more than aware […]

The income tax won’t save the day for budget writers

Washington’s budget problem took root in 2023–25, when legislators appropriated substantially more than they expected to collect in revenues. Legislators have widened the gap between spending and revenues since then (despite substantial tax increases in 2025 and 2026). Will the new income tax fix the problem on its own? Officially, the 2026 supplemental balances over […]