Corporate interests shouldn’t take precedence over everyday people in WA’s budget

We believe our families are worth fighting for and so is our future. That’s why our organizations came together this legislative session to insist that state lawmakers invest in all of us — the people of Washington state.

We, along with so many advocates and everyday people, reminded lawmakers they faced a false choice. Responsibly dealing with a budget deficit didn’t have to mean cutting funding from early learning and public schools, health care and support for people with disabilities, affordable housing programs and the jobs of state employees. 

Lawmakers could have made a different, better choice: find new sources of revenue that fund the programs and services people rely on. We insisted that legislators work to balance our state’s upside-down tax code — one that already favors the wealthiest people and most profitable corporations at the expense of everyone else. Spoiler alert: They did a bit of both.

Our tax code can only be described as upside-down and rigged to benefit those with the most. 

For almost 100 years, our tax code has relied heavily on three main revenue sources – sales tax, property tax, and business and occupation tax – that make for an antiquated structure that doesn’t reflect today’s economic realities. 

Our tax code asks those with the least to pay the highest percent of their income in state and local taxes. Working families are taxed at a rate up to six times higher than the wealthiest in our state. Even after the passage of the capital gains tax on the ultra-wealthy in 2021, our state tax code is still rated second to last in the country when it comes to tax fairness.

Simply put: Revenue collected into our state coffers can’t keep up with our real needs. From a growing population to increasing demands for state services to the effects of inflation, it costs more every year to meet the needs of Washingtonians. As a result, legislators face structural budget challenges year after year. While legislators this year turned to new and higher taxes to fill roughly $9 billion of a budget hole estimated to be $12 billion or more, they’ll have to solve the same problem again in the future.

Legislators started the session bolstered by an electorate that voted overwhelmingly in favor of maintaining the capital gains tax they passed in 2021. They proposed bold new progressive revenue measures that would have avoided cuts to vital programs and helped permanently address the structural budget issues that perennially plague state budget writers.

On the progressive revenue menu this year were new ideas like taxing Tesla and other electric car manufacturers who sell their excess zero-emission vehicle credits for huge profits. Lawmakers ultimately picked some low-hanging fruit. They closed tax loopholes, taxed synthetic nicotine products, extended sales tax to IT services, and raised taxes on alcohol.

Legislators also relied on more conventional – and popular – taxes like making the capital gains tax even more progressive by raising the rate for profits over $1 million. Lawmakers raised business and occupation taxes, adding surcharges for the most profitable corporations like financial institutions and advanced computing businesses.

Regrettably, some of the best ideas to pump the brakes on wealth inequality did not pass. The High-Earner Tax on Employers, which would have ensured our state’s largest businesses do their part, and a Financial Intangibles Tax on the ultra-wealthy did not survive. These policies would have raised the most revenue, made our tax code more equitable, and prevented cuts to vital services.

Still, we applauded legislative leaders and rank-and-file members alike for their work to save programs that working families depend on. Unfortunately, that turned to a slow clap as we watched a few of the state’s biggest businesses pick off key votes with their multi-million-dollar lobbying campaign. We wish the new governor had provided a clearer vision and direction to prevent harmful budget cuts.

In the end, legislators were forced to slash some services because they knew the governor would only approve a limited scope of revenue bills. They eliminated a program to support foster youth and delayed implementation of several programs, including early learning for kids from low-income households. They also made the biggest cut to abortion access funding in state history.

Our organizations are in this for the long haul, fighting for a Washington where everyone belongs and can thrive. We showed up in Olympia this session as parents, seniors, teachers, caregivers, and state employees, and thousands of us rallied, wrote letters, signed in, and testified in support of revenue over cuts. We’ll be back again next year because we believe that everyone should pitch in, including the wealthiest individuals and biggest corporations, so all of us can have thriving communities. We’re worth fighting for.