Washington Tax Decision Looming

Washington Governor Bob Ferguson expected to decide today on massive tax bill

– Olympia, WA

The battle and the rhetoric have been fierce when it comes to the massive $9.4 billion tax bill moving inexorably through both state congressional houses.

Democrats, owning a near super-majority of seats in the Senate and the House in Olympia, have seemingly turned over every rock in the state to find more money for a projected $16 million budget shortfall over the next four years. Republicans meanwhile, the minority voice, have decried the measures of the bill as too-far reaching and oppressive.

In the midst of it all, stands Ferguson, who is now being tested on many campaign promises to minimize tax increases. In March, Ferguson seemed to stand fast in that promise, rejecting a wealth tax provision in the original budget bill that would have increased taxes on the wealthy and on certain businesses.

After retooling the two year budget and the tax bill meant to pay for it all, the piece of legislation now sits on Ferguson’s desk, awaiting signing. He has a deadline of May 20, 2025 to either approve or reject.

And so far, he has been mute on his decision:

“You’ll hear on Tuesday,” Ferguson told reporters as he walked through a parking lot at Saint Martin’s University in Lacey, WA. “It’s a work in progress. Each day, we make some decisions and delay others. Some are a little more complicated, so we’ll keep talking.”

Though pressed by reporters to give some indication, Ferguson only smiled and said “I want to keep people guessing.”

Seems an odd time to be so glib, with so much on the line.

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 if this bill is passed today:

• 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 will face if Ferguson signs this package into law today. 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.

If the bill is vetoed by Ferguson today, then it will go back to the state congress, where there may be enough votes in both houses to override the governor’s veto. But even if it doesn’t and more retooling is required, one thing is sure, from the very mouth of Ferguson: “It is becoming unaffordable for a lot of Washingtonians.”