A new version of a proposed tax on incomes over a million dollars has finally swayed Washington Gov. Bob Ferguson.
Newly added changes to the bill, also referred to as the "millionaires tax," include using the tax revenue for free breakfast and lunch for schools, additional funds for child care, a further expansion of income levels that qualify for the Working Families tax credit, and a sales tax exemption on over-the-counter medications.
Ferguson had previously wavered on his support in the bill’s earlier form, saying the legislation did not include enough to support working families as written.
“I’m glad to say the latest floor amendment to the bill achieves these critical goals, and will help make our state more affordable,” he said. “I will sign this version of the bill.”
The income tax is expected to bring in around $3 billion of revenue beginning in 2029 and would impact around 20,000 households in the state. Ferguson had repeatedly said he would like the bill to have more of its revenue earmarked for working families. Originally, the bill sent much of the revenue it generated back to the state’s general fund.
Rep. April Berg (D-Mill Creek) brought the amendments forward, and said they were a result of conversations had with legislators in both the House and the Senate, along with the governor.
“[We had] lots of good, good conversations about how to provide the most fair and progressive tax code for Washingtonians, but also how to help our families with everyday issues like affordability,” Berg said.
“[Ferguson] has been a thoughtful champion of so many of the policies that are in this,” she added. “You can see his fingerprints, the Senate's fingerprints, and, of course, the House’s fingerprints all over this policy.”
One big addition to the bill is a carve out of about 5% of the generated revenue to go towards the Fair Start For Kids Account, which supports a number of early learning and child care programs.
The bill is expected to head to a final floor vote in the House on Monday, and could head to the governor’s desk shortly after that.
Lawmakers are also racing to finalize the supplemental budget for this year before a March 12 deadline. The currently proposed budget includes deep cuts to child care, early learning, and higher education, all of which lawmakers hope to avoid in future years if the income tax is passed.
