Washington state lawmakers have money on their minds — more specifically, taxes.
Democrats are switching gears on a property-tax proposal, and other revenue bills are barreling ahead, with votes scheduled Tuesday in the House Finance Committee.
Legislators are racing to balance the state’s budget, one that has a significant gap between planned expenditures and revenues, before the 2025 session is set to end Sunday, April 27.
Washington Democrats revealed an updated revenue package last week that would raise nearly $12 billion over four years. However, Gov. Bob Ferguson criticized the revenue plan, calling it “too risky” amid ongoing federal-funding uncertainty.
Senate lawmakers on Saturday gave the green light to expanding the state sales tax — a move critics argue would hurt regular Washingtonians the most.
Senate Bill 5814 would raise nearly $3 billion for the next budget and $4.7 billion across four years. The proposal would apply the sales tax to additional services, targeting areas such as security systems, digital advertising and IT training. Large businesses would have to fork over a one-time sales tax pre-payment, too, to help fill the budget gap.
Another proposal that cleared the Senate Saturday, SB 5794, would repeal or sunset certain tax breaks and impose a new tax on self-storage rentals.
“The idea that we’re somehow going to encourage housing by taxing storage units, which … is simply a tax on renters,” Senate Minority Leader John Braun said on the floor Saturday. “They don’t have enough room to put their stuff, they get a storage unit.”
Senate Republicans have broadcast a budget alternative that wouldn’t raise taxes.
But Senate Majority Leader Jamie Pedersen said on the floor Saturday that it isn’t sustainable to divert funding away from reducing carbon pollution and addressing climate change toward supporting the Working Families Tax Credit, as the opposing party’s budget recommends.
“This bill is necessary for the preservation of the state government and its existing institutions,” the Seattle Democrat said of SB 5794.
Democrats have warned that an all-cuts budget would spell devastating consequences for key state programs, including in public health, long-term care and human services.
Another Democrat-backed revenue measure, SB 5813, seeks higher tax rates for Washington’s ultra-rich residents via more progressive capital gains and estate taxes. It suggests an additional 2.9% surcharge on gains from the sale of bonds, stocks and other financial assets above $1 million a year.
Treasure Mackley, executive director of Invest in Washington Now, said Monday that her organization is glad to see the Legislature move ahead with proposals that would ensure wealthy Washingtonians pay what they actually owe.
“The most important thing now is lawmakers pass a budget that avoids drastic cuts to critical services for working people and that this budget is signed by the Governor,” Mackley told McClatchy in a written statement.
Republican state Sen. Matt Boehnke of Kennewick said in a Monday news release that Democrats are doubling down on taxes at the same time families are confronted with higher costs.
“These bills do not reflect the values or priorities of Washingtonians,” he said. “They reflect a government addicted to spending.”
Senate bills 5794, 5813 and 5814 are scheduled for an 11:30 a.m. executive session Tuesday in the House Finance Committee.
What about a property-tax increase?
On Monday, the Washington State Standard reported that a controversial property-tax bill has shifted, with Democrats ditching their plan to allow for the property tax growth cap to be increased from today’s 1% limit to as high as 3%.
Republicans have sharply criticized that measure. Hundreds rallied against possible property-tax hikes at the state Capitol last week.
Ferguson called the pausing of that plan the proper move.
“We have to look at a lot of revenue sources, and I think we need to minimize the impacts on working people in the state,” he said Monday morning. “So I think they made the right decision.”
State Rep. Jim Walsh of Aberdeen, who also chairs the state’s Republican Party, called news of the bill switch-up a positive sign in a post on X.
But other Republicans adopted a somewhat more critical tone. Senate Republicans said in a Monday news release that the underlying bill — which remains active, without the growth-limit sections — would still allow for major property-tax increases by elevating the lid on local levies.
Braun, the Senate minority leader, called the Democrats’ new focus “just as troubling for homeowners and renters.”
“House Bill 2049 still aims to lift the cap on local school levies — a change that might benefit wealthier areas like Seattle but will only deepen education-funding inequities across Washington,” Braun said in the release.
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