Blog

Working families tax credit remittances were much lower than expected in FY 2023; bills would expand eligibility and increase the amount for renters

The working families tax credit (WFTC) began issuing remittances in 2023. Low-income people of any age are eligible if they have children. Low-income people with no children are eligible if they are 25 to 65 years old. The amount of the remittance is based on the number of children and phases out with income. Maximum […]

Bill would require businesses receiving tax preferences to pay for child care

HB 2322, which is scheduled to be heard by the House Finance Committee tomorrow, aims “to increase employer-provided child care for employees.” Under the bill, any business that receives a business & occupation (B&O) tax preference (the state’s terminology for exemptions, exclusions, deductions, deferrals, credits, and preferential tax rates) that is created, expanded, or extended […]

Proposed substitute REET and transfer tax bill would redirect REET revenues to housing accounts and would not meaningfully reduce taxes

Yesterday the House Finance Committee heard a proposed substitute to HB 2276, which would increase a real estate excise tax (REET) threshold and add a new 1% real estate transfer tax. As I wrote last week, the bill as introduced was ambiguous about whether the transfer tax applied to the portion of the selling price […]

Only 7% of proposed real estate transfer tax revenue would go to housing accounts

Yesterday a bill was introduced that would create a new real estate transfer tax, which would be levied on top of the real estate excise tax for properties that sell for over $3.025 million. HB 2276 is scheduled to be heard in the House Finance Committee on Jan. 18. This is a new tack in […]

Washington ranks 35th overall in the Tax Foundation’s 2024 State Business Tax Climate Index, down from 29th last year

Washington’s overall ranking in the Tax Foundation’s State Business Tax Climate Index is 35th this year. (The 2024 index reflects state tax climates on July 1, 2023.) Our ranking has dropped quite a bit over the past few years—Washington ranked 29th in 2023 and 15th in 2022. The overall ranking is composed of five broad […]

Paid family and medical leave actuarial report recommends changing the premium rate formula again

In response to the cash deficits in the paid family and medical leave (PFML) program, the Legislature acted in 2022 to require the Employment Security Department (ESD) to produce an annual actuarial report on the program’s financial condition. The report must include estimates of the “lowest future premium rates necessary to maintain solvency of the […]

Paid family and medical leave premium rate will decrease from 0.8% to 0.74% in 2024

During today’s meeting of the paid family and medical leave (PFML) advisory committee, the Employment Security Department (ESD) announced that the PFML premium rate for 2024 will be 0.74%. (Employees will be statutorily responsible for 71.43% of the premium and employers will be responsible for 28.57%.) The family and medical leave insurance (FMLI) account went […]

Seattle’s general fund and payroll expense tax revenue forecasts have increased since August

Yesterday Seattle’s Office of Economic and Revenue Forecasts (OERF) presented the city’s October revenue forecast for the general fund and several other revenue streams that go to dedicated accounts (including the payroll expense tax). For the city’s general fund, the forecast estimates that revenues will decline in 2023 and 2024 (year over year). However, that […]

Seattle’s revenue forecast anticipates slowing growth, but general fund revenues are expected to be higher than assumed in the adopted budget

Yesterday Seattle’s Office of Economic and Revenue Forecasts presented the city’s August revenue forecast. It includes updated estimates of general fund revenues and “general fund adjacent” taxes (e.g., the payroll expense tax and the real estate excise tax) for 2023 and 2024. The forecast notes that, compared to the April forecast, general fund revenues are […]

Why is Seattle considering new revenue?

As I wrote yesterday, a work group in Seattle has come up with nine options for new revenue for the city. The following chart is from the revenue work group’s report. It shows that the city increased general fund spending in recent years above the amount of available ongoing revenues (even though revenues have been […]