Blog

Seattle’s Revenue Stabilization Work Group offers nine new tax ideas, including a local capital gains tax and changes to the payroll expense tax

Last year, the City of Seattle established a Revenue Stabilization Work Group to “evaluate and pursue innovative options to stabilize revenue and look for opportunities to reduce the regressive nature of Seattle’s tax system on low-income, working, and middle-class residents.” This is in response to a structural deficit in the city’s general fund. The work […]

Capital gains revenues and the June forecast

As Kriss wrote last month, the June revenue forecast for funds subject to the outlook (NGFO) is up over the outlook period (2021–23, 2023–25, and 2025–27) compared to the March forecast. Additionally, NGFO revenues are expected to grow by 2.4% in 2023–25 and by 6.8% in 2025–27. (However, adjusted for inflation, revenues are expected to […]

Washington’s state and local taxes and spending per capita ranked 14th and 13th highest among the states in 2021

The two main ways to compare taxes and spending across states are per capita and as a share of personal income. The U.S. Census Bureau released state and local finance data for fiscal year 2021 a few weeks ago. According to the data, Washington’s state and local taxes per capita increased 8.2% to $6,663 in […]

Happy Fiscal New Year’s Eve!

Today is the last day of state fiscal year 2023 and the last day of the 2021–23 biennium. Tomorrow is the first day of the 2023–25 biennium, which comprises fiscal years 2024 and 2025. The operating budget and other legislation enacted this year appropriated $69.804 billion from funds subject to the outlook (NGFO) for 2023–25, […]

No paid family and medical leave deficits in sight, after cash influx from state general fund

The paid family and medical leave program has been in deficit several times since Spring 2022. (Our report about the program’s problems is here.) The monthly ending balance of the family and medical leave insurance (FMLI) account has been negative six times, including this April (see the chart below). At the April meeting of the […]

New brief: Seattle’s Payroll Expense Tax is Highly Concentrated and Shaping Up to Be a Volatile Revenue Source

The City of Seattle adopted the payroll expense tax (PET) in July 2020. The rate of the tax varies from 0.7%–2.4% depending on the total payroll expense of a business and the amount of an employee’s compensation. The PET is the city’s fourth-largest tax source, behind property, business and occupation, and retail sales taxes. In […]

Capital gains tax revenues, school construction, and volatility

As I wrote last month, capital gains tax collections for FY 2023 were significantly higher than forecasted. By statute, the first $500 million collected in a year will go to the education legacy trust account (ELTA), a fund subject to the outlook (NGFO). Anything over that will go to the common school construction account (CSCA). […]

Capital gains tax collections have come in higher than anticipated

The state’s March 2023 revenue forecast assumes that capital gains tax revenues will total $248.0 million in fiscal year 2023 (which ends on June 30). All of that would go to the education legacy trust account (ELTA). By statute, the first $500 million (adjusted for inflation annually) in collections goes to the ELTA (which is […]

State continues to treat working families tax credit as a spending program instead of a revenue reduction (plus, remittances to date)

This is the first year in which low-income Washingtonians can claim the working families tax credit (WFTC). According to the Department of Revenue (DOR), through May 15, the state has returned $83 million to 175,886 taxpayers. The 2023 supplemental operating budget appropriates $221.0 million for WFTC remittances in FY 2023. (And the fiscal note for […]

Budget appropriates $200 million for a reserve for the paid family and medical leave program

Last month Gov. Inslee signed SSB 5286, which makes changes to the paid family and medical leave (PFML) program rate structure. Beginning with calendar year 2024, the PFML rate will be set to maintain a three-month reserve for the program. (See here for more about the bill.) The family and medical leave insurance (FMLI) account […]