Gov. Bob Ferguson on Thursday criticized a four-year, $12 billion tax proposal from legislative Democrats as “too risky,” arguing it would set the state on an unsustainable fiscal path ahead of looming federal cuts from the Trump administration.
But Ferguson offered no details or alternative plans in a public statement issued more than a day after Democratic lawmakers unveiled the latest tax package, which dropped a wealth tax he previously criticized.
The governor’s statement stopped short of saying he’d veto the taxes or a budget that relies on them. But his criticism could add uncertainty for the Legislature in the final weeks of the session as negotiators try to craft a tax and spending plan in the face of a projected budget shortfall of $16 billion.
In his statement Thursday afternoon, Ferguson reiterated an array of cuts already imposed by the Trump administration — including slashing of public health dollars and the recent denial of emergency aid for November’s bomb cyclone. He noted 28% of the state budget relies on federal dollars, and said “significant federal cuts loom” for Medicaid, K-12 education, scientific research and other programs.
In the face of such chaos, Ferguson argued lawmakers need a “balanced approach” that combines a “reasonable amount of progressive revenue” along with spending cuts.
“At a time of great economic uncertainty and assaults by the Trump Administration on core state services for working families, raising $12 billion in taxes is unsustainable, too risky and fails to adequately prepare Washington state for the crisis that looms ahead,” Ferguson said.
The package Democratic budget writers rolled out this week would raise about $12 billion over the next four years. It discarded earlier plans for a wealth tax and a payroll tax on big companies like Microsoft and Amazon.
Instead, lawmakers want to dial up more familiar taxes. Their plan would raise the state’s capital gains tax on people with stock or other financial profits of more than $1 million.
The plan also would raise an array of business and occupation tax rates, with additional surcharges for the biggest companies, and apply the sales tax to more services. Lawmakers have also proposed lifting a longstanding 1% cap on annual increases in property tax collections for the state and counties, raising it to 3%.
Ferguson’s statement did not say which taxes he opposes or supports.
Backers of the Democrats’ tax package say it would avoid painful cuts to state services and place much of the tax-increase burden on larger companies and wealthy individuals.
But detractors, including Republicans and an array of business groups, have slammed the proposal as irresponsible, saying they’d raise costs for everyone. Critics also have pointed out that state tax collections are projected to rise by billions of dollars even without adding new levies.
Sen. Chris Gildon, R- Puyallup, said in a statement the Senate GOP agrees with Ferguson that $12 billion in new taxes is a bad idea, but pushed back on the governor’s effort to blame the state’s financial woes on Trump.
Higher taxes would be unsustainable “no matter who is in the White House,” said Gildon, the Senate Republicans’ budget lead.
Ferguson’s critique Thursday was in keeping with his past comments saying the Legislature owes it to the public to scour the budget for more savings before imposing new or higher taxes.
In February, Ferguson identified some $4 billion in savings he said could help close the budget gap, including furloughs for state workers, cuts to travel budgets, ending some unneeded building leases, and trimming state payments to food banks.
Despite his overall criticisms, Ferguson said the Legislature has made “progress on key issues” in its latest proposals, including dropping the wealth tax, which he had argued was an untested and risky option.