Blog

Legislature keeps kicking the can down the road

The cause of the state’s operating budget shortfall is, ultimately, that in 2023–25, the Legislature chose to spend $4.8 billion more than the state collected in revenues. (All figures in this post are in terms of funds subject to the outlook, or NGFO.) The budget balanced thanks to the use of one-time funds. The budget […]

An alternative income tax proposal would require a constitutional amendment

Yesterday, Rep. Walen introduced HB 2738, which would impose an income tax, and HJR 4213, which would amend the state constitution to explicitly allow the income tax. HB 2738 is very similar to the income tax bill (SB 6346) that was passed by the Senate on Monday. Indeed, the base text of HB 2738 is […]

Senate-passed income tax bill increases the amount of tax relief compared to the original version, and the governor is proposing additional relief provisions

The Senate passed the income tax bill (SB 6346) on Monday. I wrote about the bill as introduced here and here. Amendments were adopted by the Ways and Means Committee and on the Senate floor, some of which will have significant fiscal impacts. Some of the amendments made by the Ways and Means Committee include: […]

Since the current budget was adopted, revenues are up $166 million over the outlook period

According to the Economic and Revenue Forecast Council (ERFC), revenues for funds subject to the outlook (NGFO) are now forecasted to be $1.856 billion higher over the outlook period (2023–25, 2025–27, and 2027–29) than had been forecasted in November. The forecast for 2025–27 increased by $827.4 million, to $75.276 billion. The forecast for 2027–29 increased […]

Income tax would increase revenues by more than $3 billion a year

The Department of Revenue (DOR) has now published a fiscal note for the income tax bill. According to DOR, the income tax would increase revenues by $2.717 billion in fiscal year 2029, $4.080 billion in 2030, and $3.487 billion in 2031. A small portion of these revenues would be allocated by the bill to specific […]

More proposals to modify last year’s tax package, including rolling back the estate tax rate increases

The 2025 tax package was rushed through at the very end of session, which led to a lot of uncertainty. As I wrote in December, several bills have been introduced for the 2026 session that would make changes to ESSB 5814 and ESSB 5794, which were part of the 2025 package. Other bills have been […]

Cataloging the Legislature’s tax increase proposals

An income tax is not the only tax increase being considered by the Legislature this year, even after enacting historically large tax increases last year. If enacted, the new proposals would add to an already high tax burden in Washington. This post catalogs the tax increases that have been introduced so far this year (it […]

How the income tax proposal would work and how the revenues would be used

The income tax bill language has now been introduced. SB 6346 and HB 2724 are identical; SB 6346 is scheduled for a public hearing in the Senate Ways & Means Committee on Friday. Before I get into the details of the text, I want to make three overarching points: Calculating the tax The bill would […]

New brief: Washington Businesses Paid 50% of State and Local Taxes in 2024

From 2000 to 2024, business and occupation tax collections increased by 269.5%. Businesses also pay sales taxes, property taxes, and many other state and local taxes. A new report from the Council on State Taxation finds that businesses paid 50.0% of all state and local taxes in Washington in fiscal year 2024. Washington businesses paid […]

With a state income tax, combined income and payroll tax top rates could reach 18% in Seattle

Gov. Ferguson supports a tax on annual income over $1 million. There is no public bill language yet, but the Washington State Standard reports that legislators expect the tax rate in the income tax bill to be 9.9%. (Similarly, the current capital gains tax rate on capital gains exceeding $1 million is also 9.9%.) Today, […]