Priority Actions
This week’s Action Alerts are all related to the new revenue necessary for the state budget to be balanced with minimum reductions in levels of service. See an overview of the current budget proposals HERE.
These bills are scheduled for public hearings this week. The League supports a balanced tax structure that is fair, adequate, flexible, and has a sound economic effect. These bills in combination are consistent with that position. None of them will be sufficient if enacted without the others.
Because no one knows yet which elements of each budget will be included in the final package, the League is advocating for all of the revenue proposals.
These Senate revenue bills will have public hearings in the Senate Ways & Means Committee on Monday, March 31, at 4:00 pm.
SB 5797 Financial Intangibles Tax. This bill would establish a tax of $10 on every $1,000 of assessed value of certain financial assets (stocks, bonds, exchange-traded funds, and mutual funds) held by individuals with more than $50 million of these assets, paid by about 4,300 wealthy individuals. It generates approximately $4 billion per year starting in fiscal year 2027 and will be allocated for public schools, helping the state uphold its paramount duty with new, increased funding for special education services and the growing daily operating costs of running our public schools.
⚠️Sign in PRO for SB 5797 HERE before 3:00 pm on March 31.
SB 5796 Removing the Cap on Employer Payroll Taxes. This bill would establish a 5% tax on large employers on the amount of payroll expenses above the Social Security threshold, which is currently $176,100 per year. This tax is limited only to companies with $7 million or more in payroll expenses— about 5,289 companies. The proposal is similar to the city of Seattle’s “JumpStart” tax and includes a full credit for businesses already paying that tax. It would raise about $2.3 billion per year once fully implemented, going to public schools, health care, and other programs that protect the safety and wellbeing of the public and provide basic needs assistance for seniors and those with developmental disabilities.
⚠️Sign in PRO for SB 5796 HERE before 3:00 pm on March 31.
SB 5798 Allowing Property Tax to Grow by Population and Inflation. This bill would raise the property tax growth limit for the state’s common schools levy and for cities, counties and special purpose districts, from the current 1% cap to the combined rate of population growth plus inflation. Local governments have the option to take a lower growth rate if they so choose.
Instead of being tied to an arbitrary number, it would allow the growth limit to reflect the actual cost of providing public safety and related services. The proposal also completely exempts participants in the “Property Tax Exemption for Senior Citizens and People with Disabilities” program from paying the state property tax, giving a tax reduction for some of our most vulnerable community members.
The state property tax is dedicated to public schools, with about $779 million in additional funding over the full four-year budget cycle, while increased funding in cities and counties would go to public safety, criminal justice, and community protection.
⚠️Sign in PRO for SB 5798 HERE before 3:00 pm on March 31.
SB 5794 Repealing Ineffective & Obsolete Tax Preferences. This bill would repeal 20 tax exemptions where the public policy objective was not met, it is unclear whether the policy objective was met, or the exemption is legally obsolete, according to nonpartisan auditors at the Joint Legislative Audit & Review Committee. It includes in-state hauling, gold bullion, prescription drug wholesalers, and more. This generates just over $1 billion over the full four-year budget cycle for public schools, health care, and social services.
⚠️Sign in PRO for SB 5794 HERE before 3:00 pm on March 31.
SB 5795 Cutting the Regressive Sales Tax. As cost of living rises, Washington’s current regressive tax code puts an additional strain on households already struggling to meet their basic needs. This proposal reduces this disproportionate impact on low- and middle-income households with a half-point sales tax reduction, from 6.5% to 6% – a decrease in revenue of approximately $1.3 billion per year.
⚠️Sign in PRO for SB 5795 HERE before 3:00 pm on March 31.
These House revenue bills will have public hearings in the House Finance Committee on Thursday, April 3 at 8:00 am.
HB 2045 Surcharge on High-Grossing Corporations and Financial Institutions. This bill would establish a 1% Business & Occupation (B&O) tax surcharge on businesses with taxable income over $250 million. This modest surcharge only applies to the wealthiest corporations—approximately 400 businesses statewide—ensuring that small businesses and working families remain unaffected. The bill also includes an increase to the surcharge on specified financial institutions (approximately 200) with annual net income of $1 billion or more from 1.2% to 1.9%.
Under this proposal, Washington will generate nearly $600 million in fiscal year 2026 and nearly $2 billion in fiscal year 2027, ensuring a revenue stream will shield essential public services from economic downturns and political uncertainty, creating a more stable and sustainable financial future for the state.
⚠️Sign in PRO for HB 2045 HERE before 7:00 am on April 3.
HB 2046 Property Tax Fairness Through Financial Intangible Assets Tax. This bill would establish a Financial Intangible Assets Tax (FIT), which is a property tax of $8 on every $1000 of assessed value on certain financial intangible assets, such as stocks, bonds, mutual funds, and index funds, with the first $50 million in assessed value exempt from the tax to best ensure tax fairness. Other exemptions include pensions, retirement accounts, and education savings accounts. The Department of Revenue estimates around 4,300 wealthy Washingtonians will pay the tax, generating approximately $2 billion per year, beginning in fiscal year 2027, which will be dedicated to the Education Legacy Trust Account to support Washington families and fund vital investments in K-12 schools.
⚠️Sign in PRO for HB 2046 HERE before 7:00 am on April 3.
HB 2049 Increasing State and Local Flexibility to Fund Schools and Public Safety. This bill invests in the state’s paramount duty to fund K-12 education and build strong and safe communities, modifies the state and local property tax authority, and adjusts the school funding formula. The bill maintains the 1% cap on property tax growth but allows for increases based on inflation and population changes, not to exceed 3%. The bill also adjusts levy equalization methods to ensure equitable funding for historically underinvested areas of the state, including rural school districts, mitigating widening funding gaps between schools. The Department of Revenue estimates the change will increase funding for state investment in K-12 schools by $50 million in fiscal year 2026 and $150 million in fiscal year 2027.
⚠️Sign in PRO for HB 2049 HERE before 7:00 am on April 3.
Action Alerts
This Week in the Legislature
Town Hall: Resisting Threats to Democracy
The 2025 Legislative Issues