WA Supreme Court: B&O deduction for investment income applies only to investment income that is “incidental to the main purpose of a business”
State statute allows a business and occupation (B&O) tax deduction for “amounts derived from investments”—unless they are “amounts received from loans” or “amounts received by a banking, lending, or security business” (RCW 82.04.4281). Nevertheless, today the state Supreme Court held that “Businesses can claim only the deduction for investments that are incidental to the main […]
October 16 , 2024 - Emily Makings
Our policy briefs on the initiatives, in one place
Ballots for the general election are being mailed out this week. Three initiatives on the ballot would have fiscal impacts for the state, and we’ve written policy briefs on each of them: The briefs explain what the initiatives would do and provide important context about how they would affect state revenues and programs.
October 02 , 2024 - Emily Makings
A new transportation revenue forecast: the great, the good, and the ugly
On Friday, the new Transportation Economic and Revenue Forecast Council (TERFC) approved its first transportation revenue forecast. This is great news for the public because it’s a huge improvement in transparency. It’s good news for the Legislature because the transportation revenue forecast is no longer on autopilot. But it’s also bad news because revenues are […]
September 26 , 2024 - WRC
New brief: I-2109: Repealing the State Capital Gains Tax
Initiative 2109 would repeal the state capital gains tax statute. The Office of Financial Management estimates that repealing the capital gains tax would reduce state revenues by $424 million in FY 2025, by $820 million in the 2025–27 biennium, and by $919 million in the 2027–29 biennium. The reductions would only affect the education legacy […]
September 26 , 2024 - Emily Makings
Paid family and medical leave premium rate is projected to increase to 0.91% next year (and it could hit the statutory maximum in 2027)
According to the Employment Security Department, the paid family and medical leave (PFML) premium rate may rise to 0.91% next year. (This is not yet final because the rate is based on the account balance on Sept. 30. The final rate will be announced in October.) The PFML actuary, in a PFML advisory committee meeting […]
September 19 , 2024 - WRC
New brief: I-2124: Making the State’s Long-Term Care Program Optional
If approved by voters, Initiative 2124 would make the long-term services and supports trust (LTSST) program optional for all workers. The Office of Financial Management believes that revenues to the LTSST account would decrease as workers choose to opt out of the program, but it does not estimate how many opt outs there would be. […]
September 12 , 2024 - Emily Makings
September carbon emission allowance auction proceeds were below forecast, growing the CCA budgetary imbalance
On September 4, the Department of Ecology sold 5,260,000 carbon emission allowances at a price of $29.88. Consequently, the amount collected by the state was $157.2 million. State revenues from the allowance auctions to date now total $2.306 billion. However, the revenues from the September auction are $59.5 million below what was assumed in Ecology’s […]
September 11 , 2024 - Emily Makings
Budget-related notes from the gubernatorial debate
During the gubernatorial debate last night, two budget-related points were made that I think deserve some context. (The Seattle Times has video here.) First, Bob Ferguson said that the Climate Commitment Act (CCA) “helps fund a working families tax credit. That’s helping out working families all across the state. We need to expand the amount […]
August 05 , 2024 - Emily Makings
Contrary to the public investment impact disclosure, I-2109 would not impact school construction funding
This year will be the first in which “public investment impact disclosures” will appear on the ballot, along with the ballot titles for I-2109, I-2117, and I-2124. (Initiative texts, fiscal impact statements, and public investment impact disclosures are available here. There is a lawsuit about the applicability of the public investment impact disclosures to these […]
July 31 , 2024 - Emily Makings
Capital gains tax revenues are not dedicated to the Fair Start for Kids Act, and targeting education spending at 50% of the budget would be questionable policy
The Seattle Times interviewed the gubernatorial candidates about education spending. The resulting news story makes editorial comments about the adequacy of state spending and is inaccurate about the use of capital gains revenues. First, in a few places the story ties the capital gains tax to the Fair Start for Kids Act, which made enhancements […]