(The Center Square) – It wasn’t an April Fools’ Day joke. Washington state Gov. Bob Ferguson announced Tuesday afternoon that he will not sign proposed budgets by legislative Democrats that “rely far too much on taxes,” including a wealth tax that is “novel, untested, difficult to implement” and could be overturned by courts.
That’s a marked change from his predecessor, former Gov. Jay Inslee, who backed a wealth tax in his lame-duck budget proposal released in December.
Ferguson addressed a room full of reporters at a Tuesday afternoon news conference to make clear he is not a fan of House and Senate budgets proposed by fellow Democrats in the Legislature.
“Neither budget is close to one I can sign for two key reasons,” the governor said. “First, they each propose far too much in taxes. Second, they both rely on a wealth tax which is novel, untested, difficult to implement – and most importantly for purposes of adopting a sustainable budget – will face an immediate challenge in court.”
Senate Democrats passed a $78.5 billion operating budget on Saturday for the 2025-2027 biennium, while the House approved a two-year $77.8 billion operating budget just after midnight on Tuesday.
Both budget plans rely on versions of a wealth tax that would apply to people with financial assets – stocks, bonds and the like – of more than $50 million.
Ferguson was adamant in his opposition to a risky wealth tax.
“I will not sign that,” he said.
Ferguson also made it clear that he would not support a budget that raids the state’s rainy-day fund.
“We are already an outlier on this. We are one of just four states with reserves of 10% or less of our annual budget,” the governor said, noting that reserves protect citizens in the event of a natural disaster “and an increasingly hostile federal government.”
The Senate Democrats’ budget proposes draining the budget reserve account to help balance the short-term budget gap, while the House Democrats proposed keeping about $3 billion in reserves over the next two years.
Ferguson said the updated revenue forecast adds another billion to the projected operating budget shortfall over the next four years, bringing the total gap to $16 billion.
“It’s gone from bad to worse,” the governor said.
Ferguson blamed the administration of President Donald Trump for federal cuts he said would impact Washington’s budget.
“We can and we must prepare for even greater cuts from the federal government,” he said. “This is a five-alarm fire, and I intend to treat it that way.”
Ferguson left the door open regarding some tax increases.
“Would you entertain a 5% payroll tax?” a reporter asked.
“What I’m going to do is have a conversation with both caucuses about what our options are, but I’m not going to negotiate that here,” Ferguson responded.
He was also asked about property tax hikes but said he would not discuss his position on that, saying it would be part of ongoing discussions with budget leaders.
The Center Square asked Ferguson if he is reviewing Senate Republicans’ no-new-taxes budget proposal.
“I’ve got a meeting in about 30 minutes with Sen. Braun and Rep. Stokesbary after this, so I’m sure I’ll be hearing their perspective … we’ve had multiple meetings just like I’ve had with Democratic leadership and those conversations will go on,” he said. “We cannot adopt a budget with anywhere near the level of taxes currently proposed by the House and Senate.”
Rep. Travis Couture, R-Allyn, issed a statement that was emailed to The Center Square following Gov. Ferguson’s press conference on the budget.
“This is good news. For years, Republicans have been discouraged that Democrats blew the state’s $15 billion surplus, wasted all of that money on new programs and expanding programs with one-time dollars, and raided the Rainy-Day Fund multiple sessions in a row in order to recklessly increase spending levels based upon money that we never had with revenue assumptions that were not based in reality,” said Couture.
