Politicians may earnestly believe their actions will have no repercussions but they do. The issue is not which tax or fee increases. It is about the total impact on taxpayers, businesses and the family budget.

The Washington Legislature recently adjourned after passing the largest tax increase in state history, and small businesses are going to bear the brunt of it.

Lawmakers, lobbyists and business leaders are all watching to see what the governor does. Ferguson, just four months on the job, is aware of the acute interest and seems determined to keep folks in suspense right up until May 20.

Business tax hikes make up more than half of the roughly $9 billion package, which still needs a sign-off from Gov. Bob Ferguson.

The proposal, embedded in House Bill 2049, seeks to allow an increase in the growth factor from the current 1% cap to the combined rate of population growth plus inflation within a taxing district, not to exceed 3%. This would apply to the state’s common schools levy and for cities and counties, as well as special purpose districts.

Ferguson did not cite any specific taxes he dislikes in the proposals that House and Senate Democrats viewed as the linchpin for completing their negotiations on an operating budget that overcomes a projected $16 billion shortfall over the next four years.

There are hikes in business and capital gains taxes, new sales taxes on services and greater property tax collections by the state and local governments.

While there have been lots of numbers thrown around about the size of the state’s budget shortfall, the reality is that the state has a spending problem, not a revenue program. 

In Washington state alone, the agency says that more than 35,000 have yet to claim an estimated $33.7 million in unclaimed refunds from the 2021 tax year, with the median refund being $880.