Washington legislators continue work on tax proposals with less than a week before session ends

OLYMPIA, Wash. – Lawmakers continue to take big steps toward passing a tax package to close a multi-billion-dollar deficit, but one tax increase appears to be off the table.

On Saturday, the Senate passed a handful of revenue proposals, including an increase to capital gains and estate taxes, removing certain tax preferences, and extending the sales tax to computer-related services and other areas previously exempt.

The trio of bills are slated for a vote out of a House committee Tuesday morning. Democratic senators supporting the bills reiterated their argument that new revenue is needed to maintain crucial state services.

“We have to modernize the tax code to keep up with the economy, so we have the resources we need to provide for public schools, health care, public safety and the key services to protect our most vulnerable residents,” said Sen. Noel Frame, D-Seattle, during Saturday’s debate on the computer-related services tax bill.

Republicans, however, have long said that tax increases on businesses and wealthy individuals will be passed down onto working people and ultimately harm the economy.

“We are sending an unmistakable signal to folks who are interested in investing and building our economy, to create an economy that raises everybody’s boats – that you are no longer welcome here in Washington,” said Senate Minority Leader John Braun, R-Centralia, during the debate on increasing capital gains and estate taxes.

On Monday, the House was slated to debate increasing business taxes around manufacturing, retail and other sectors, and a bill around education funding. First reported by the Washington State Standard, provisions in the education funding bill to increase the one-percent cap on property tax revenue growth were dropped by the bill’s sponsor.

Speaking with reporters after a bill signing Monday morning, Governor Bob Ferguson said it was good to not change the cap on property taxes.

“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. “So I think they made the right decision.”

Ferguson has been critical of tax proposals from legislative Democrats this session, calling the package currently being advanced “unsustainable” and “too risky.” Though he said lawmakers are making good progress on bringing in “progressive revenue” and making government more efficient.

“As you might imagine on something as challenging as a $16 billion budget shortfall, legislators and governors might have different ideas on some of the specifics,” Ferguson said. “But I think we’re moving in the right direction to get to a budget that I can sign.”

can sign.” The budget has to be passed out of the legislature by Sunday. The governor said he is hopeful things will end on time, but he is okay with things taking a few more days to get a budget that meets his priorities.

“If it takes a few more days, I think the people of the state will understand,” he said.

Albert James is a television reporter covering state government as part of the Murrow News Fellowship program – a collaborative effort between news outlets statewide and Washington State University.