With the state budget signed, how much more taxes should WA families expect to pay?

Washington Gov. Bob Ferguson signed the state’s operating budget into law Tuesday that will be funded with billions of dollars in new taxes.

It’s a move that critics say will hit average Washington residents directly in the wallet.

Majority-party Democrats argue that new taxes were needed to preserve key services and balance the multi-billion-dollar budget’s spending and revenue. But Republican lawmakers rebuffed claims that more taxes were necessary while warning that ordinary residents would feel the fiscal effects.

Ferguson said after signing the budget May 20 that he hears the concerns of Washingtonians worried about new taxes “loud and clear.”

“I understand very clearly that this will be a challenging budget for Washingtonians,” the governor said. “There’s no two ways around that. It will be.”

He added: “But I believe it’s a balanced approach, and I think it sets us on a trajectory for a more sustainable future.”

Asked for a ballpark number on what the new taxes would cost the state’s families, Ferguson said he wasn’t sure that such a figure exists — but that it would depend on many factors.

Senate Republicans were happy to broadcast their estimate. Their colleagues across the political divide offered one after being pressed.

No surprise that the gulf between the two is quite wide. Here’s the math.

Republicans: New taxes will cost $2,000 per family

Pasco state Sen. Nikki Torres, assistant budget lead for the Senate Republicans, shared her party’s math homework in an interview.

Senate Republicans based their projection off Democrats’ state tax package, including legislation boosting business and occupation (B&O) taxes, a sales tax expansion, the new Tesla tax, capital gains and estate tax reforms, and a bill nixing certain tax breaks.

After combining those five tax tenets, Senate Republicans looked at the four-year total, Torres said. They then divided those tax increases by the state’s population of about 8 million.

Each year the cost to taxpayers would creep up. And by the end of the four-year cycle — so, Fiscal Year 2029 — it’d wind up costing a family of four roughly $2,000 more per year, Republicans claim.

Torres said the number doesn’t include anything related to the transportation budget, either, such as the 6-cent gas-tax hike.

Washington residents are already grappling with rising prices on daily items such as eggs and tortillas, she said. Even the added taxes on businesses will affect families’ budgets, she contends.

“When you’re going to go make your purchases at the grocery store or at the retail store, it’s going to get passed on to the consumer,” Torres said.

Senate Deputy Republican Leader Drew MacEwen called the budget a significant setback for working families.

In a news release, MacEwen again cited the $2,000-more-per-year figure and said Washingtonians deserve leaders who pursue fiscal responsibility before more taxation.

“This budget grows government at the expense of hardworking citizens and sends the wrong message to families and businesses already questioning whether they can afford to stay in our state,” the Shelton Republican said.

Democrats’ estimated cost per family: $900

Senate Democrats’ calculations differ.

Reached for comment, Senate Democratic Caucus (SDC) staff noted there’s much economic uncertainty between now and Fiscal Year 2029. They countered the GOP estimate, saying an average family of four wouldn’t pay capital gains or estate taxes, which target the wealthiest estates and individuals.

The caucus staff cast doubt on the idea that Tesla would be able to pass the cost of its tax to consumers and stay competitive. That tax pertains to electric-vehicle credits, not car sales. Plus, Democrats say, the vast majority of families of four don’t own a Tesla, meaning they wouldn’t be affected by that tax at all.

Staff also factored in inflation and pointed out that businesses usually don’t pass 100% of tax increases to consumers. Rather, research shows it’s often between 50% and 65%.

And on the sales-tax front, higher-income families would still fork over more money than their lower-income counterparts, the Democrats point out.

All told, SDC’s count amounts to a roughly $900 tax increase for a typical family of four in Fiscal Year 2029.

State Sen. June Robinson, the Senate Democrats’ lead budget writer, said in an emailed statement that the bulk of the revenue package is progressive. The state’s richest residents were asked to pay more through measures including the capital gains and estate tax reforms and the B&O tax boost.

Robinson noted that Democrats would rather have included a wealth tax, which would’ve affected the state’s 4,300 richest residents who hold more than $50 million in financial assets. But that idea was shot down by Ferguson.

Majority-party budget writers made $7 billion in cuts over four years, “balanced with targeted revenue increases,” Robinson said. Those dollars were then reinvested in housing, schools, public safety and other crucial services.

“Cutting any further would have been deeply irresponsible and jeopardized those services families and communities across Washington rely on,” Robinson said.

‘Very challenging to put a number’ on family cost

K.D. Chapman-See, director of the state’s Office of Financial Management (OFM), said that although some taxes may indeed have impacts, it’s hard to unwind what those could mean for an average family.

Budgets make investments that improve affordability for the state’s families, Chapman-See said. She cited examples, such as health-care and child-care subsidies for qualifying residents, as well as financial aid for families with kids in college.

Any tax impacts are worth thinking about in “balance and context of the investments in the budget that do help improve affordability for Washington families,” she said.

Does OFM have its own cost-to-Washington-families projection?

“I think that doing so would be very challenging, to put a number, when you think about the holistic way in which these things are all interrelated,” Chapman-See said.

This story was originally published May 25, 2025 at 5:00 AM.

Simone Carter

The Olympian

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