Gov. Bob Ferguson, a Democrat, is criticizing the latest round of tax proposals Washington state Democrats put forward this week, citing concerns about cuts from the Trump administration.

“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,” Ferguson’s statement on Thursday said.

Democrats in the Legislature recently unveiled a new version of their proposed tax changes, dropping their previously proposed wealth tax plans. Their backtrack came after opposition from the governor earlier this year.

The new revenue plan from Democrats would boost business taxes, open the door to property tax increases, and expand the state’s capital gains tax. It would also make various changes to the state’s sales tax — adding new sales taxes and ending some exemptions for digital services.

But Ferguson called their latest round of proposals “unsustainable” in light of actions being taken — or threatened — by the feds. His statement did not call out any one particular tax included in lawmakers’ latest plans, only criticizing the overall dollar amount of the tax increases being proposed.

“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,” Ferguson’s statement said.

Ferguson’s statement was the first glimpse offered to lawmakers about where he stands on their latest approach to taxes. With a little more than a week left in this year’s legislative session, lawmakers had spent most of the week in the dark about how the governor would respond.

“My hope is that he has things that he likes, things that he doesn’t like — but I’ve been waiting to hear something he likes,” House Speaker Laurie Jinkins, D-Tacoma, told reporters early Thursday afternoon, before the governor weighed in. Jinkins added that Democratic leaders would meet with the governor later in the day.

In his statement, Ferguson did offer some praise for lawmakers’ latest slate of proposals.

“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,” Ferguson wrote.

The revised slate of tax proposals comes after Democrats pitched a budget in late March that included a major new wealth tax — it would have implemented a tax on intangible assets like stocks and bonds worth over $50 million. Officials estimate the proposal would have applied to only a few thousand of the state’s richest residents. But Ferguson said a week later, he wouldn’t go along with that.

“If the legislature wishes to complete our work on time, they need to immediately move the budget discussions in a significantly different direction,” Ferguson said at the time, calling the wealth tax “untested” and vulnerable to legal challenges.

A wealth tax lite?

Democratic leadership signaled Thursday that they may try to move forward with a more focused version of the wealth tax anyway — potentially to test how it fares in the courts. The proposal is scheduled for action in a Senate committee Friday morning, and Democratic leaders say conversations about the bill are ongoing.

“I would say that nothing is off the table until we have a budget signed, and a tax package approved and the governor has signed everything, and we’re out of here,” said Seattle Sen. Noel Frame, the sponsor of the wealth tax bill.

Tax plan from Washington House Democrats could raise nearly $15B for state budget

While Ferguson has said he wouldn’t sign a budget that relied on a wealth tax, he previously left the door open to the idea of a limited version of the wealth tax making it onto the books in order for it to be tested in court.

House Speaker Jinkins said Thursday that lawmakers are looking at ways to do that.

“We may pass a wealth tax and it’ll be what the House and Senate can agree to, but we have heard from the governor what his preference is,” Jinkins said. “We’re very much aware and want to try and do that if we can.”

This fight among Democrats has played out as labor unions and other progressive members of the Democratic party call for the state to enact more taxes on the state’s wealthiest residents while businesses and anti-tax critics push back.

Republicans are adamantly opposed to the proposed new tax increases and have condemned Democrats’ latest round of tax proposals.

“Washington families are already feeling the pinch of high inflation, soaring housing costs, and a slowing economy. Now, Democrats want to pile on even more taxes,” Sen. John Braun, of Centralia, said in a statement released earlier this week.

In addition to the new revenue proposals, lawmakers in Olympia are still considering a list of other changes — like an increase to the state’s gas tax that lawmakers are likely to include in the transportation budget. Lawmakers are also looking at a series of targeted fee increases on things like access to state parks and hunting and fishing licenses.

But revenue is only one part of this year’s budget equation — lawmakers still haven’t released their final spending plans, or what the final version of cuts to programs and services will look like. Many lawmakers anticipate the final budget vote will happen on the final day of session, with the negotiated deal coming out in the days before.

A number of cuts have already been floated, including delaying promised new spending in child care and closures of certain state-run facilities — like prisons and residential centers for people with disabilities. The governor has also directed agencies to cut back on their spending and reduce administrative costs on things like travel and equipment as part of his $4 billion cuts-first approach.

The governor and Senate lawmakers have also weighed different furlough options for state employees, and while House lawmakers didn’t propose state worker furloughs in their initial budget proposal, anything is possible until a final budget deal is struck, approved by lawmakers and signed into law by the governor.

They have until the legislature is scheduled to adjourn for the year on April 27 to pass a deal if they want to avoid a special session. Even then, there are a number of factors that could bring them back anyway — including vetoes from Ferguson or more action from the Trump administration.

Jeanie Lindsay is a reporter with KUOW. This story comes to you from the Northwest News Network, a collaboration between public media organizations in Oregon and Washington.

It is part of OPB’s broader effort to ensure that everyone in our region has access to quality journalism that informs, entertains and enriches their lives. To learn more, visit our journalism partnerships page.

News Source : https://www.opb.org/article/2025/04/18/washington-governor-slams-democrats-new-taxes/