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Dear Friends and Neighbors,
Earlier this week, House and Senate Democrats unveiled their operating and transportation budget proposals, which together rely on more than $24 billion in new taxes. If signed into law, their proposals will drive thousands of jobs out of Washington, make commuting even more expensive, and tax the joy out of everyday life at a time when we are already the third-most expensive state for residents.
On the operating budget side, Democrats are proposing a payroll tax, a so-called “wealth tax,” and an increase to the business and occupation (B&O) tax. These measures would make it far more expensive for job creators to hire, with added costs inevitably passed on to consumers. The Democrats’ wealth tax is really an innovation tax that threatens to erode Washington’s position as a hub for economic success. If passed, it would send a clear message to the next generation of brilliant entrepreneurs: take your billion-dollar ideas to states like Florida or Texas instead.
But Democrats aren’t stopping at businesses and jobs. They’re also targeting the simple joys of life with higher taxes on bottled beverages and cell phones, new fees on sporting event tickets and vacation rentals, and increased costs for outdoor recreation like hunting, fishing, and hiking. In addition, their proposals seek to shift health care costs from the state to working families, which would increase expenses $1,400 per year for a family of four. Meanwhile, property taxes would also increase.
All of this comes as a result of Democrats turning a $14 billion surplus three years ago into a $7–10 billion deficit today. They now want you to pay the price for their recklessness.
On the transportation side, Democrats are proposing at least $4 billion in new taxes, including up to a nine-cent gas tax hike (despite Washington already having the third-highest gas prices in the nation—$1 more than the national average), new highway user fees, higher vehicle weight and registration fees, increased ferry fares, and more.
As an alternative to raising taxes and increasing fees, our transportation lead, Rep. Andrew Barkis, has proposed redirecting funds from the Climate Commitment Act toward projects that would fix deteriorating roads and bridges. Democrats have refused to entertain this idea, choosing instead to protect that money so it can be spent on projects focused on “environmental justice.”
In a statement earlier this week, Barkis criticized the Democrats’ proposals, saying:
“This budget relies on massive tax hikes while funneling billions into transit, electrification programs and other initiatives that serve relatively few Washingtonians. Governor Inslee and majority Democrats pitched the Climate Commitment Act as a necessary climate solution that would only cost drivers “pennies” at the pump. In reality, it has made life more expensive without delivering promised results. The CCA has generated nearly $3 billion, but close to 90 percent of its 2024 spending had no measurable impact on carbon emissions. Meanwhile, the program is adding about 40 cents to the cost of a gallon of gasoline and 50 cents for diesel.”
In sum, the operating and transportation budget proposals introduced by Democrats this week would be disastrous for Washingtonians. They would kill jobs, tax the joy out of life, and make it more expensive to live, work, and raise a family. Over the next 30 days, we will do everything we can to find a better path forward.
Here’s a look at all the tax increases the Democrats are proposing:
Taxing the jobs out of Washington:
- Imposing a job-killing tax on local businesses, including a B&O tax surcharge on large businesses and financial institutions, which would negatively impact around 400 businesses statewide. (HB 2045)
- Taxing unrealized capital gains through a wealth tax. (HB 2049)
- Creating a new payroll tax for employers with more than $7 million in payroll expenses. (SB 5796)
Taxing the joy out of Washington:
- Adding a 10-cent per beverage container tax. (HB 1607)
- Increasing the Discover Pass fee by 50%. (SB 5390)
- Imposing nearly a 50% tax on Zyn and similar smoking-cessation products. (HB 2033)
- Increasing liquor license fees by 50%, including banquet permits for weddings and events. (HB 2035)
- Increasing hunting and fishing license fees, including for youth and seniors. (HB 2031)
- Imposing a new sales tax on Airbnb, VRBO, and other short-term rental homes. (SB 5576)
- Imposing a new ticket fee for sporting events and concerts. (SB 5801)
- Doubling the rental car tax rate and applying the tax to peer-to-peer car sharing services. (SB 5801)
- Adding an additional tax on the sale of cell phones, smartwatches, and other devices. (HB 1517)
- Imposing an 11% sales tax on firearms and ammunition. (HB 1386)
- Imposing a 10% charge at duty-free stores, affecting the sales of alcohol, cigarettes, tobacco products, vapor products, nicotine products, and merchandise. (HB 2061)
Taxes that directly hurt the working class:
- Shifting health care costs from the state to working families, averaging $1,400 per year for a family of four. (SB 5083)
- Tripling the property tax growth limit and increasing local school property tax levies. (HB 2049)
- Increasing the state’s fuel tax by 9 cents (currently at 49.4 cents) and targeting fuel-efficient vehicles with a new highway use fee. (HB 2043)
- Increasing gas prices by an estimated $0.05-$0.25 in the next two years by increasing carbon intensity reductions under the Clean Fuel Standard. (HB 1409)
- Allowing counties to impose a local real estate excise tax. (HB 1480)
- Increasing prescription drug prices by taxing drug wholesalers. (SB 5794)
- Increasing taxes on wired, wireless, and VoIP lines and for prepaid wireless services. (HB 1581)
Staying engaged
As House Republicans continue championing solutions to fix Washington and working to defeat bad bills and bad budget proposals, I encourage you to follow us on X, Facebook, Instagram and YouTube. Please share our content with your family, friends and neighbors. Working together is the only way we’re going to effectively fight back against a majority party that is determined to take our state in the wrong direction.
It is an honor to serve you.
Warmly,
Drew Stokesbary
