OLYMPIA –The Washington state Senate passed key parts of a $12 billion tax package Saturday, despite no clear support from Gov. Bob Ferguson. Democrats, using their near-supermajority, approved measures to expand the capital gains tax, raise taxes on large corporations and banks, and extend the sales tax to more services — collectively aiming to raise $3.2 billion in the next two-year budget and $5.5 billion over four years.
The centerpiece, Senate Bill 5814, would generate $2.9 billion by applying sales tax to services like staffing, advertising, and lobbying. Democrats also advanced bills to boost capital gains taxes, revise business tax breaks, and lift the cap on annual property tax growth.
Meanwhile, the House Finance Committee moved forward additional components expected to face floor votes Monday.
Ferguson, while warning Thursday the plan was “unsustainable” and calling for a mix of revenue and spending cuts, has not specified which taxes he opposes. Senate Majority Leader Jamie Pedersen said the bills align with discussions Democratic leaders had with Ferguson, but noted, “I can’t speak for the governor.”
Republicans argued the increases are unnecessary, offering an alternative no-new-taxes budget. Senate Minority Leader John Braun criticized the sales tax expansion as a blow to renters and low-income residents, while Sen. Chris Gildon called a proposed early sales tax payment a “budget gimmick.”
Democrats maintain the new taxes are needed to fund vital programs in healthcare, housing, child care, and education.
Photo by Jacquelyn Jimenez Romero/Washington State Standard