Seattle Elections / Olympia
By Krist Novoselić (May 28, 2025)
The ruling party in Olympia just passed the biggest tax hike in state history. In their zeal for new revenue streams, big tax advocates ignored obvious flaws with their proposals. Gov. Ferguson told reporters he was signing bills needing, "a closer look."
Seattle Senator Noel Frame led Democrats with her vision of restructuring state taxes. Her whole political raison d’etre is calling for big tax increases.
An Olympia insider told me how majority party leaders tried to rewrite the state's tax code with only 10 days left in session. Gov. Ferguson — when signing the bills — told reporters the new laws already need fixing! He's quoted in the Washington State Standard,
“There are some revenues there that I think require a closer look to make sure there are not unintended consequences. So I would not be surprised if you see some changes beyond technical changes to those revenue streams.”
Apparently, there was not enough time left in the session to consider and solve glaring problems.
Sen. Frame's sales tax increases reach far and wide. Hastily written Senate Bill 5814 is projected to generate $1.1 billion in revenue over the next two years and $2.7 billion over four years.
The new law places a sales tax on hiring temporary workers. One result is a funding wash for public schools. A Washington Observer story features a quote from Pierce County school districts urging the governor to veto,
“Adding an additional average sales tax of 10% to these services will cost our districts an estimated $5 million. Given that we represent 16 of 295 school districts across the state, it would not be implausible to suggest that the costs of this new tax would exceed all the additional funding provided by the special education funding bill this year.” [My emphasis.]
SB 5814 also expands the sales tax to digital advertising services, along with a range of other technology services. Legal experts Kranz, Nebergall and Hague write, "The new law's focus on internet advertising creates a prima facie discriminatory tax on electronic commerce barred by the federal Internet Tax Freedom Act (ITFA)." The article says this, "is a lawsuit waiting to happen."
If you want to really dig into the scope of the new taxes, Seattle legal firm Ballard Spahr offer a good analysis: Washington State Passes Significant Tax Increases Affecting Both Businesses and Consumers.
Activist campaigns for Seattle city council and mayor are calling for even more “progressive revenue.”
Big wealth creators already fund things like Seattle’s Jumpstart tax, and will soon pay into Social Housing. The pressure is increasing on business to look elsewhere — as money naturally goes where it’s treated best.
Amazon’s SONIC building in Bellevue is fabulous. Despite this, after the 2025 legislative session, the edifice can't escape the greater Soviet of Washington — the Eastside of the lake is no longer as business friendly as before.
Seattle is a wildcard, polarized between moderates and activists. Since 2021, due to dominating public safety concerns, city voters have mostly elected moderates, whose sensibilities have influenced fiscal policy. However, 2024 elected enthusiastic Tax & Spend activists like CM Alexis Rinck and unabashed Bolshevik Rep. Shawn Scott.
This year’s wildly successful Social Housing ballot measure was a stunning money and power grab by a Social Democratic coalition — at the projected cost of $52 million a year, paid by Seattle big business.
The Capitol Hill Seattle Blog quotes business leaders saying Jumpstart tax revenues are decreasing due to money leaving the city. Judging by this example of capital flight, activists pushing too hard for more taxes will eventually affect Social Housing funding negatively.
There could be even more “progressive revenue” coming! Another source told me to expect a city, 2% capital gains tax next year, regardless of how Seattle elections turn out this fall.
Prosperity can care for all if there is a balanced approach. Our state public policy has lurched towards activist populism. It’s really up to individual voters to feel the value of our Big State, paid for by taxes reaching far and wide. Gov. Ferguson is right, policies have consequences, and the new taxes will be revisited — one way, or another.
I’m not making predictions, but unintended consequences can affect voters’ attitudes at any time.
We’ve seen voters change course pretty fast.
For example, in 2010, major retailers sponsored I-1105, proposing shuttering state liquor stores in favor of privatizing liquor sales. Voters rejected this idea and state stores survived.
One year later, voters changed their minds by approving 2011’s I-1183, which was basically the same ballot proposal.
The NO I-1183 campaign stuck to scare tactics, “Problem drinking can increase as much as 48 percent.” For some reason, the wild claims no longer worked.
Below is a :30 video from the NO campaign which could not stop voters from seeing a new path regarding alcohol sales. Perhaps voters wanted the sweet spot with private liquor sales? It’s food for thought, or at least the aperitif. Cheers!
Krist Novoselić is Cascade Party Chair. He serves on the board of directors in an at-large position.
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