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NWHPBA IMMEDIATELY POST SESSION BILL REPORT – April 29, 2025
INITIAL POST MORTEM, WASHINGTON LEGISLATURE
The 2025 Legislative Session adjourned Sine Die on April 27 – on time. This on-time adjournment was rather shocking considering the size of the budget deficit, but the majority Democratic leadership came in demanding tax increases and that they got. Although the original tax package was a whopping $21 billion at its max, in the end Governor Ferguson’s warnings that that was too much reduced the new tax package to $9.4 billion – still the highest in state history.
This Legislative session was the worst in my 36 years of sessions both in terms of bad bills for business and the constant push for agendas on rent control, UI for Striking Workers, and other issues. This session also saw the loss of former Speaker of the House Frank Chopp (who just retired last year), sitting Senator Bill Ramos from the 5th legislative district, and on the last days of session, the unexpected passing of Senator Chris Gildon’s wife. Even with the partisan battles, the personal losses of those involved in this process are felt by all.
The final budget as passed is $77.9 billion, an 8.2% increase OVER the last biennial budget. Spending was increased by over $1 billion above maintenance (the cost to keep all programs the same) with most of that coming from increases to K-12 education. In addition, several old programs were sacrificed to make room for new bills that passed this year. Governor Ferguson has promised to go over the budget thoroughly before he signs it. The Seattle Times is encouraging this in a recent editorial.
The tax package is the news for all businesses in WA state. No one got away unscathed and somehow the “tax the rich” mantra became “make businesses pay their fair share” – even though businesses pay almost 50% of the taxes to the state through B&O, property and sales tax. Below is a brief summary of the taxes that passed.
Revenue Package Overview:
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Excluding transfers to and from the transportation budget, the revenue package would generate $9.379 billion, with key legislation including:
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HB 2081 – B&O tax increases (.5% surcharge on businesses grossing more than $250 million effective January 1, 2026. Rate increases for all businesses effective January 1, 2027 – the lowest rates will all go to .5%).
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SB 5814 – Adds sales tax to advertising services and some internet based services. Also increase nicotine taxes.
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SB 5813 – Capital gains and estate tax increases – moved Cap Gains down to $1 million. Increased qualified business interest deductions.
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SB 5794 – Tax preference repeals
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HB 2077 – Zero-emission vehicle program aka “Tesla tax”
In the end, the property tax increase was killed and replaced with additional levy authority for school districts. For a complete list of bills, contact NWHPBA: execdirector@northwesthpba.org.
I will do a more in-depth report after the Governor is done with his work. In the meantime, I urge you to contact Governor Ferguson and urge him to veto the B&O tax increases in HB 2081. Our state’s economy cannot afford these increases!
Carolyn Logue, NWHPBA Lobbyist
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