Washington Gov. Bob Ferguson balked at Democratic lawmakers’ latest tax package on Thursday, calling it “too risky” given the budget tumult that actions by the federal government could trigger.
“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 said in a statement.
“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,” he said.
Ferguson did not cite any specific taxes he dislikes in the proposals that House and Senate Democrats viewed as the linchpin for completing their negotiations on an operating budget that overcomes a projected $16 billion shortfall over the next four years.
Democrats have already slimmed their tax ambitions, discarding a set of hikes Ferguson previously came out against that could have raised as much as $21 billion over four years.
Absence of further guidance from the governor on what he’d like to see threatens to slow, even derail, their progress and could drive the Legislature into overtime when the regular session ends April 27.
Special session “is certainly not our Plan A for us,” House Majority Leader Joe Fitzgibbon, D-Seattle, said.
Ferguson, who was in Seattle on Thursday, released the statement 20 minutes before he met virtually with Democratic leaders of both chambers.
That conversation touched broadly on spending reductions and revenue raising. The governor did not spell out his preferences on taxes or how large a tax package is acceptable in the meeting.
“I think there are some proposals he is warmer to and some proposals he is cooler to,” Fitzgibbon said. “We have a lot to talk about in terms of options for paths forward.”
Ferguson has said repeatedly he wants to see a balance of progressive revenue and spending reductions. His staff provided options to some members this week.
“We have said that if the revenue number is too high, as he said in his statement, that we need more suggestions than they have provided so far,” Fitzgibbon said.
House Speaker Laurie Jinkins, D-Tacoma, said in a statement, that House Democrats share Ferguson’s “belief that a balanced approach combining progressive revenue and spending reductions is the right way to meet the needs of our state.”
She said her caucus appreciates all viewpoints and the governor’s preferences are taken into account as they look to ensure residents have shelter, food, access to health care, and strong public schools.
Two Republican senators applauded Ferguson’s critique of the Democrats’ latest tax plan.
“If we truly want our state to be ready for any sort of fiscal turbulence, let’s have a new budget that avoids tax increases completely — whether they’re ‘progressive’ or not,” Sen. Chris Gildon, R-Puyallup, the Republican lead on the Senate budget committee, said in a statement.
Sen. Nikki Torres, R-Pasco, assistant budget leader, said “To us, any new taxes would be risky. The question now is whether the Democrat legislators will heed the governor’s words or continue going back and forth with him.”
Democrats in the House and Senate jointly released a smorgasbord of tax proposals on Tuesday, including higher taxes on big businesses, hiking the rate on capital gains above $1 million and allowing a 1% annual limit on property tax growth to rise up to 3%.
They’ve pitched other hikes as well, such as an expanded tax on nicotine products like Zyn and a new sales tax on rented self-storage units.
And they’re seeking to have some large businesses make a one-time pre-payment of sales tax owed to the state, a maneuver that would suck more tax revenue into the 2025-27 budget that otherwise would have been due the month after it ends.
Thursday’s conversation isn’t deterring Democrats from pursuing the new tax bills, yet.
“At the moment, I think we need to keep our options open and keep our bills moving,” Fitzgibbon said.
Earlier this month, Ferguson rejected tax plans from the House and Senate that leaned heavily on a tax that would’ve applied to residents with certain assets worth more than $50 million. The governor and others are not confident that tax would survive an expected court challenge.
Ferguson lauded the Legislature in his statement Thursday for moving on from the so-called wealth tax.
A couple hours before lawmakers met with the governor, Jinkins told reporters she hoped to hear “things that he likes and things that he doesn’t like.”
“I’ve been waiting to hear some things that he likes,” she said. Asked if she had heard him cite anything that he likes in any proposal, she joked in response, “Have you?”
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