Washington state's millionaires tax cleared the Legislature last week after a 26-hour House debate and is now headed to Gov. Bob Ferguson's desk.
Ferguson, a Democrat, who had supported the idea in concept,
"The key thing for me was making sure revenue came in and went right back to the people who need it," Ferguson said. "It includes the largest tax break to small businesses in the state's history and we are sending 460,000 tax rebates of $300 to $1,300 to working families."
The governor said it wasn't just about altering the tax structure, but also how the money would be used that was important to him.
"The millionaires tax will apply to less than one half of one percent of Washingtonians but make life more affordable for millions. I look forward to signing it."
The measure places a 9.9% tax on income over $1 million and it's expected to generate $4 billion a year in revenue.
The governor deemed the short session a success in general. The state passed a two-year budget last year, and then made changes to bring the budget back into balance after federal budget cuts created a gap, lawmakers said.
The millionaires tax creates the state's first income tax, a concept barred by a 1936 constitutional change.
Republicans plan to challenge the millionaires tax in court, said House Republican Leader Rep. Drew Stokesbary.
Washington Democrats have majorities in both houses.
He and some other lawmakers are concerned it creates a slippery slope that could lead to expansion of the income tax.
"We have one of the most extensive social safety nets in the country," Stokesbary said. "We can do that because we have been able to attract companies like Boeing."
He said the bill will discourage companies from locating in the state.
Democrats consider the bill's passage a win.
"The 26 hours we spent was really hard. But then I think about how many families are up all night thinking about how they will pay for the kids' lunch — or small business owners think about how they keep their business afloat," said House Speaker Laurie Jinkins, D-Tacoma. "Then, I think, spending 26 hours debating [how] to help with all of these things was totally worth it."
Lawmakers also approved an $80.2 billion supplemental operating budget, nearly $2 billion higher than the 2025-27 biennium budget adopted in May to address rising costs due to inflation and impacts from tariffs.
The budget protects core services by "backfilling in the areas of food, shelter and health," Rep. Timm Ormsby, chair of the House Appropriations Committee, said in a statement.
The budget adds $370 million in funding for SNAP and Medicaid to cover cuts at the federal level.
The supplemental budget "is about protecting the basics people count on — food on the table, a roof overhead and access to health care," said Sen. June Robinson, D-Everett, chair of the Senate Ways & Means Committee.
Republicans were not happy about the budgetary increases. Rep. Travis Couture, R-Allyn, called the budget a "ticking fiscal time bomb" in a statement.
Even with the expanded budget, the state faces an estimated $878 million budget hole in 2027. It also taps $880 million from the rainy-day fund, leaving $3.3 billion in reserve by 2029.
The proposal to fill the hole in the next biennium is to tap the overfunded police and firefighters pension fund.
The budget also assumes $2.3 billion for 2027 to 2029 from the millionaires tax.
The $16.6 billion transportation budget passed for the biennium preserves the package passed last year that funds ferry system, maintenance and traffic safety projects.
A bipartisan bonding agreement will direct $1.3 billion for road and bridge preservation, $200 million for maintenance work, $28 million for ferry projects and $100 million for safety-focused projects on the state's highways.
It also allocates $2.5 million through 2029 to support repairs to the Fairfax Bridge, which was damaged by severe
The three bills comprising the supplemental transportation budget — Senate Bills
