More than 60 business executives across Washington — including from Costco, Microsoft, Nordstrom, Amazon, Zillow and T-Mobile — are asking state lawmakers and the governor to reconsider raising business taxes to balance the state operating budget.
The corporate leaders sent the letter Wednesday as legislators are working to resolve a multi-billion-dollar budget shortfall ahead of the scheduled end of session on April 27.
Gov. Bob Ferguson said at a Tuesday press conference that both chambers’ budget plans propose “far too much in taxes.” The Democratic governor also said he wouldn’t sign off on a so-called wealth tax.
Democratic lawmakers, who hold sturdy legislative majorities in the House and Senate, have floated multiple revenue ideas to bridge a $12 billion to $16 billion budget chasm. Their Republican counterparts, unsurprisingly, have shot down such suggestions.
Now, dozens of business giants are airing their tax concerns.
“We appreciate your public service and the difficult problems that you are grappling to address,” the coalition’s April 2 letter says. “But if approved, these proposals would result in the largest tax increases in state history, perpetuating a dangerous trend of unsustainable spending growth.”
Last week a group of a dozen city leaders also penned a letter to legislators, arguing that proposals for payroll and business and occupation (B&O) taxes would harm the region’s businesses and broader economic viability.
Meanwhile, a separate coalition of nearly 70 local elected officials wrote their own letter in support of progressive-revenue ideas. That letter contends that suggested taxes would affect wealthy corporations and individuals while upholding vital services for Washingtonians. Local revenues haven’t kept up with population growth and inflation, the officials argued, while federal cuts and uncertainty stand to exacerbate budget problems.
Dozens of business leaders from across Washington state are urging the Legislature to reverse course on the Democrats’ reckless spending and tax proposals:
‘Mistake’ to enact tax hikes
Business leaders said in their April 2 letter that over the past 10 years, Washington’s operating budget has more than doubled. In just the past few years, they said, it has risen 37%.
Such growth has far outpaced the state’s inflation, population and personal income, “threatening our economic stability,” according to the letter.
The execs said they were encouraged by the news that Ferguson would not green light a proposed wealth tax. They also voiced support for the governor’s five “fiscally responsible” priorities. One such tenet: preserving the state’s Rainy Day Fund reserves.
Business leaders said that even without any new taxes, the state’s current sources of revenue are forecast to grow by 6.8% in the 2025-27 biennium. In the following biennium, they’re projected to climb another 7.7%.
“Given this, we believe it is a mistake to enact, as proposed last week, billions of dollars of additional tax increases with the apparent goal of growing tax revenue by almost 15 percent in the next two years alone,” the letter says.
Ferguson this week cited concerns about an ongoing string of federal cuts being made by the administration of President Donald Trump. In his view, Washington needs to brace for more federal funding uncertainty: “This is a five-alarm fire, and I intend to treat it that way.”
The business executives mentioned economic uncertainty — at both the national and international levels — in their letter. They argued that now is the time for honest examination of “where investments are most effective, followed by targeted reductions.”
“The state cannot afford to measure its performance solely by dollars spent,” the coalition wrote, “but on actual outcomes.”
In today’s global economy, jobs and capital can migrate to varying markets, the letter says. Washington could lose jobs to more business-friendly states, it says.
Washington won’t be able to realize its goals to improve public safety, education, affordable housing and homelessness without a robust economy, they wrote: “And this in turn depends on having successful and healthy businesses.”
The letter was led by four business-related groups: the Seattle Metro and Bellevue chambers of commerce, Washington Roundtable, and the Association of Washington Business.
Additional corporate signers include officials with the Seattle Mariners, Puget Sound Energy, Comcast Pacific Northwest Region, Alaska Air Group, AT&T, Redfin and Washington Trust Bank.
Hitting the right balance
House Speaker Laurie Jinkins said Wednesday that her chamber’s B&O tax proposal would apply to the highest earners, not small businesses.
Democrats in the House and Senate, as well as Ferguson, have rejected an all-cuts budget, Jinkins said. A just-reductions budget would be devastating to areas such as education, housing and health care, she added.
“What we have to achieve is the right sort of balance here,” the Tacoma Democrat said. “There will be tax increases. It’s figuring out the right kind of balance and making sure that we’re able to minimize any harm that comes to regular, everyday Washingtonians.”
State Sen. Chris Gildon, the Senate Republican budget lead, sees it differently. He told McClatchy he thinks the right balance can be struck without additional taxes.
The Puyallup Republican said he’s heard from smaller companies that buy products and supplies from the larger businesses that would be affected by Democrats’ tax proposals. These increases could lead the bigger corporations to boost prices on goods — which in turn would be absorbed by mom-and-pops and passed on to consumers, he said.
“If you are in favor of affordability for the people of Washington state,” Gildon said, “you cannot vote to increase taxes at a time when you don’t need to.”
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