OLYMPIA, Wash. – Washington Senate Democratic budget leaders have unveiled a new revenue proposal aimed at funding the 2025-27 operating budget.
Sen. Noel Frame (D-Seattle), vice chair of the Senate Ways & Means Committee for Finance, said in a release that the budget targets the wealthiest individuals and large corporations to support public schools, health care, and other essential services.
The proposal includes a financial intangibles tax, removing the cap on employer payroll taxes, and adjusting property tax growth limits. Senate Democrats said these measures are expected to generate significant revenue, with the financial intangibles tax alone bringing in approximately $4 billion per year starting in fiscal year 2027.
Senate Majority Leader Sen. Jamie Pedersen (D-Seattle), emphasized the importance of this approach, stating, “This proposal reflects what we’ve heard from our communities: the wealthiest few should share more of the responsibility of investing in public schools and the services people need.”
In addition, the proposal includes repealing ineffective tax exemptions and cutting the regressive sales tax from 6.5% to 6% to reduce the tax burden on low- and middle-income families, said Senate Democrats.
“We’re confident every single one of these proposals are ready for implementation, can withstand legal challenges, and will raise the revenue from the wealthiest few that we need to fund the schools and services Washingtonians not only need, but deserve.” Sen. Frame said.
On the other side of the aisle, State Senate Republicans including Pasco Senator and assistant budget leader, Sen. Nikki Torres (R-Pasco), voiced strong opposition to the $20 billion tax package.
“Republicans brought up the idea of a temporary 1% sales-tax cut in 2022, when the state had a surplus. The Democrats did nothing. Now they’re proposing to cut the sales tax half a percentage point, but only along with the largest set of tax increases in state history – and the sales-tax cut wouldn’t take effect until 2027 anyway. It’s hard to see that as a serious attempt to help the struggling households across our state.” Torres said in a release.
State Senator Chris Gildon (R-Puyallup), the Senate Republican budget leader, expressed concern about the proposed changes to property-tax growth. “This is a new kind of March madness, especially the new attempt to do away with the 1% cap voters had put on property-tax growth,” Gildon said in a release.
He argued that the increase would be regressive, impacting families and renters across the state.
Gildon also highlighted the Senate Republicans’ alternative approach, stating, “Senate Republicans have proven we can have a balanced budget without a single tax increase or a single service cut.”
Both the House and Senate are expected to negotiate and finalize the budget by April 27, with Gov. Bob Ferguson set to sign it.
For more details on the proposed tax package, we’ve set up links to the five step plan.
Financial Intangibles TaxRemoving the Cap on Employer Payroll TaxesAllowing Property Tax to Grow by Population and InflationRepealing Ineffective & Obsolete Tax PreferencesCutting the Regressive Sales Tax
