With state revenues up $1.1 billion, little need seen for general state tax increase. But some still pursue income tax.

Washington revenues have continually outperformed projections. The Washington Research Council writes in a new policy brief analyzing Gov. Inslee’s proposed supplemental budget, 

Economic growth since the 2019–21 budget was enacted has in- creased the revenue estimate over the four-year period by $1.016 billion.

The governor has not proposed a general tax hike this year, though he has called for tapping reserves to fund homelessness programs.

Still, progressive lawmakers continue to press for an income tax. Jason Mercier with the Washington Policy Center writes

Wasting no time, on the first day of the 2020 session, several lawmakers filed a brief with the state Supreme Court asking justices to reverse nearly a century of caselaw and allow a graduated income tax to be imposed. The brief was filed by Senators Lisa Wellman, Sam Hunt, Marko Liias, Liz Lovelett, Joe Nguyen, Rebecca Saldaña and Bob Hasegawa and State Representatives Eileen Cody, Beth Doglio, Laurie Dolan, Joe Fitzgibbon, Noel Frame, Mia Gregerson, Nicole Macri and Gerry Pollet.

According to the brief:

“This Court should accept review to determine the constitutionality of the graduated income tax passed by the City of Seattle and to find that the legal underpinnings that supported the Supreme Court precedent in the 1930’s no longer exist.”

The Policy Center recently conducted a poll testing public opinion about local income taxes. Unsurprisingly, 

New poll results from Washington Policy Center illustrate widespread, bipartisan opposition to local income taxes. In response to the question, “In your opinion, should local governments be allowed to impose an income tax?”  72 percent of Washington voters said “no.”  Opposition to local income taxes was reflected by large majorities of Republicans, Democrats and Independents.  Even in Seattle, voters opposed a local income tax, though sentiment was split 43 percent yes, 49 percent no.

The Research Council considers the various tax ideas being floated early in 2020, including proposed business tax increases in Seattle and prospects (slim) for a capital gains tax in the Legislature. 

The Association of Washington Business offers an informative overview of the legislative session and what it means for business in this podcast, which begins with a discussion of tax policy issues.