PSARA Weekly WA Legislative Update

April 20, 2025 

Pam Crone, Chair Government Relations Committee

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Dear PSARA Executive Board and Activists,

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Below is a description of the new revenue package the House and Senate drafted after Governor Ferguson stated he would not support the wealth tax. The compilation was created by a former lobbying colleague Majken Ryherd  I have also included the Governor’s statement characterizing the package as “unsustainable" and “too risky.”  The regular session ends April 27. If no agreement is reached by then, further action will have to occur in a special session. 

 

This will be my last weekend update. Thank you for reading it each week, signing in on PSARA priorities at committee hearings,  and contacting your legislators. 

 

Please see the May Retiree Advocate for an almost final legislative wrap-up. Do note that session will not have ended when the Advocate went to press. 

 

Thank you all. Best, Pam

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New Revenue Package

 

Capital Gains and Estate Taxes - SB 5813 (Wilson, D-30) / HB 2082 (Street, D-37)

• Adds a 2.9% excise tax on capital gains over $1 million, on top of the current 7% tax applied to gains over $270,000 (adjusted annually for inflation).

• Increases estate tax rates for individuals who pass away after January 1, 2025.

• Raises the estate tax exclusion from $2.1 million to $3 million. Revenue from this bill would go to the Education Legacy Trust Account. 

• Passed Senate Ways & Means on 4/18.

 

Business and Occupation (B&O) Tax Surcharges - SB 5815 (Saldaña, D-37) / HB 2081 (Fitzgibbon, D-34)

• Increases B&O tax rates on sectors such as manufacturing, retail, child care, and gambling.

• Imposes a 0.5% surcharge on businesses with state income over $250 million.

• Raises rates on existing B&O surcharges. Funds would support public schools, higher education, healthcare, and social services. 

• Was not considered in Senate Ways & Means on 4/18. Scheduled for executive session in House Finance on 4/19.

 

Property Tax Cap Adjustment - SB 5812 (Wellman, D-41) / HB 2049 (Bergquist, D-11)

• Adjusts the annual 1% cap on property tax increases to allow for growth tied to inflation and population, capped at 3%.

• Revenue would support K–12 education, including special education. 

• Was not considered in Senate Ways & Means on 4/18. Scheduled for executive session in House Finance on 4/19.

 

Sales Tax on Services and Nicotine Products - SB 5814 (Frame, D-36) / HB 2083 (Stonier, D-49)

• Expands the state’s sales and use tax to cover services like IT consulting and advertising.

• Includes all nicotine products, whether synthetic or tobacco-derived, under the tobacco products tax.

• Requires a one-time prepayment of state sales tax from businesses with $3 million+ in taxable retail sales in 2026. The revenue would support education, healthcare, social services, and other programs.

• Passed Senate Ways & Means on 4/18.

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FOR IMMEDIATE RELEASE: 

Contact: Brionna Aho, Governor's Communications Director, Brionna.aho@gov.wa.gov, 360-628-3843

Governor Bob Ferguson comment on proposed $12B in taxes

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Trump Administration cuts and chaos continue to

cast shadow over state budget

OLYMPIA — Governor Bob Ferguson offered the following statement on the Legislature’s proposal for $12 billion in taxes:

“I thank legislators for their hard work as we balance a budget with a $16 billion shortfall. While our budget situation is currently challenging, it may soon become dire with additional cuts and chaos from the Trump Administration. We must defend Washington in the face of that.

“Federal funds make up 28 percent of our state budget. That includes billions of dollars for Medicaid, K-12 education, child welfare and early learning, disaster recovery and response, unemployment insurance and more. Every day, funding is canceled, frozen or denied by the Trump Administration and Elon Musk. Last week, FEMA denied our request for emergency relief funds for November’s bomb cyclone. We don’t know exactly why — they did not offer a reason — but we know we met the criteria set out for this funding. The administration is attempting to cut $160 million in public health funding.

“Significant federal cuts loom for Medicaid, early learning, K-12 education, scientific research, health care and emergency response.

“Families are also bearing the burden of the Trump Administration’s tariffs, making everything from groceries to car repairs more expensive. Tariffs will hit Washington — one of the most trade dependent states in the nation — especially hard. Nearly $120 billion in exports and imports flowed through Washington state ports last year. Approximately 40 percent of our jobs are tied to trade. Tariffs on our biggest trading partners will be damaging to our economy, and particularly hurt our farmers.

“We must ensure Washington is in the best possible financial position to weather more cuts and damaging economic policies from a Trump Administration that weaponizes funding to punish those it disagrees with and forces them into compromising their values.

“We need a balanced approach, using a reasonable amount of progressive revenue and adopting solutions to reduce our spending.

“At a time of great economic uncertainty and assaults by the Trump Administration on core state services for working families, raising $12 billion in taxes is unsustainable, too risky and fails to adequately prepare Washington state for the crisis that looms ahead.

“That said, the Legislature has made progress on key issues in its updated revenue proposals. Legislators are working hard and putting in long hours. They have moved away from their reliance on an untested wealth tax and made progress on addressing our regressive tax system.

“We will continue to work together to produce a budget that supports a strong economy, and the people of Washington.”

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