Governor Signs off on Tax Hikes

Adding his signature to two bills today, Governor Bob Ferguson passed the biggest tax increases in state history.

***This is an update of a previously reported story, regarding the annual budget for Washington state.***

- Olympia, WA

In what amounts to a complete reversal of his campaign rhetoric regarding new and increased taxes, Washington’s first-year governor Bob Ferguson signed a slew of budget bills on the deadline of May 20. Stunningly enough, not a single tax bill sent to his desk was vetoed.

The primary bills in question were budget bills initiated in both the house of representatives (HB 2049) and the senate (SB 5167). The budget, expected to increase an additional $12 billion over the budget from two years ago (Washington’s Congress operates on two-year budget cycles), also adds more than $9 billion in new/updated taxes.

Staggering Tax Increases

Amidst the swirling tensions nationally caused by President Donald Trump’s tariff decisions – decisions that even now are starting to tick up prices in several sectors that were already high due to record inflation during the Biden presidency – Ferguson’s party has laid out a series of tax hikes that will threaten to destabilize further an already dissatisfied populace.

Being told they must keep their hands off the wealth of the higher earners in the state, legislators next turned their slavering jaws to the tender flesh of the middle class.

Here are three brutal realities facing Washingtonians with the passage of these bills:

• Pricing Homeowners out of their Homes: The most controversial measure of the tax bill is the removal of the 1% cap on annual property tax increases. As reported earlier, this would open up home and property owners in the state to increases in property taxes upwards of 3% annually. There is also a provision in it that would artificially bump up property taxes in certain cities or counties where population growth has spiked in previous years. For a state with one of the highest property tax rates already in place, many homeowners already on thin margins will find keeping their heads above water a challenge, as prices on everything else also seem to skyrocket.
• Higher Gas Prices: Part of the package on the table this year is a further hike on the price of gas in Washington state, increasing the state tax on gas by six cents a gallon. That may seem minimal, but the average cost today for a gallon of gas in Washington state is $1.12-$4.34 higher than the national average.
• Businesses Chipping in More: A constant refrain from the Jay Inslee days was that owning and operating a business in Washington is harder than just about anywhere else. That is only set to get more difficult as the tax bill includes increases in business and occupation tax rates across multiple sectors.

These are some, but not all, of the new difficulties Washingtonians now face with these being signed into law. And just in case the EV drivers in the state feel like they’re at least protected from the gas tax, one of the provisions in the tax bill is a new tax on Tesla owners in the state.

Ferguson has become his own self-fulfilling prophet: “It is becoming unaffordable for a lot of Washingtonians.”