Senate Democrats propose new taxes to address budget shortfall

Senate Democrats in Washington have proposed a plan aimed at raising billions of dollars to address the state's significant budget shortfall. Their plan includes a new tax on wealthy residents, changes to property tax regulations, and adjustments to employer payroll taxes. The proposed "financial intangibles tax" would charge $10 for every $1,000 of certain financial assets like stocks and bonds. This tax could potentially raise $4 billion annually by fiscal year 2027, helping support school funding. The plan also seeks to eliminate a cap on employer payroll taxes, drawing inspiration from Seattle's Jumpstart tax, expected to bring in $2.3 billion a year. Additionally, Senate Democrats want to raise the limit for property tax increases to accommodate inflation and population growth. They argue this change would generate $779 million over four years for schools. Moreover, they wish to cut 20 tax exemptions, which they claim are outdated or ineffective, raising about $1 billion over four years. The Democrats aim to decrease the state’s sales tax from 6.5% to 6%. They believe this reduction could lessen the financial burden on households, although it would decrease state revenue by around $1.3 billion each year. Senate Majority Leader Jamie Pedersen emphasized that the wealthiest residents should contribute more to public schools and essential services. Meanwhile, the Washington State Economic Forecast Council revealed a projected revenue shortfall of $845 million over the next four years. Full budget proposals from both Senate and House Democrats are expected next week. Senate Republicans, however, argue against new taxes. They propose that the state can balance its budget through smarter spending choices without raising taxes. The Legislature must finalize a balanced budget by April 27.