Washington Democrats wrapped up the 2026 legislative session by forcing through Senate Bill 6346, their long-promised “millionaire’s tax.” Despite unified Republican opposition and even three Democrats voting no, the majority muscled the bill through and sent it to Gov. Bob Ferguson, who is expected to sign it.

The new law imposes a 9.9% tax on income above $1 million, beginning in 2029. State officials estimate it will affect 20,000 to 30,000 taxpayers and generate more than $3 billion annually.

Democrats claim the money will fund state programs and provide tax relief for lower-income families. Critics say it’s simply Washington’s latest step toward a full income tax—something voters have rejected ten times.

Business groups are already warning about the fallout. According to the National Federation of Independent Business, some small businesses could be hit even if their profit margins are thin but their reported income temporarily spikes above the threshold.

A recent survey found 44% of business owners are considering leaving Washington to avoid the tax—rising to 56% in Eastern Washington.

Legal challenges are also expected immediately, with opponents arguing the tax violates Washington’s constitutional requirement that property—including income—be taxed uniformly. Read more at Seattle Red.

In the final hours of the legislative session, Democrats pushed through Senate Bill 6231, eliminating a key tax exemption for data center replacement equipment.

The House passed the measure 51–46, with eight Democrats joining Republicans in opposition. The Senate approved it earlier 26–23, also with bipartisan dissent.

The exemption had been a major driver of economic development in central and eastern Washington. Communities like Quincy have seen hundreds of jobs, higher property values, and lower local tax rates thanks to data center investment.

But Democrats needed the revenue to help fund their $2 billion spending increase, and repealing the exemption is projected to generate about $200 million over four years.

Republicans warned the move sends the wrong message to a rapidly growing industry. Rep. Alex Ybarra said data centers bring thousands of jobs—from electricians to mechanics—and warned the facilities could simply relocate to states offering better tax policies.

Rep. Jim Walsh said the vote signals that Olympia would rather raise revenue than compete for investment. Read more at Center Square.

Washington lawmakers ended the legislative session by approving budgets that expand operating spending to $80.2 billion for the 2025-27 biennium.

The final compromise relied on a mix of new taxes, reserve withdrawals, one-time transfers, and spending cuts to close a projected $2.3 billion deficit.

Democrats also passed a $2 billion spending increase, arguing it was needed to offset potential federal cuts. Republicans countered that the impact of those federal reductions is only a fraction of the spending increase.

Much of the budget relies on the new millionaire’s tax, even though the tax won’t generate revenue until 2029 and may be struck down in court.

To balance the books in the meantime, Democrats pulled $880 million from the state’s rainy-day fund and tapped other one-time transfers—including money from pension funds for retired law enforcement and firefighters.

Lawmakers also cut spending in several areas, including child-care subsidies, transitional kindergarten, and Running Start funding.

Republican budget leaders warned the plan could produce another deficit by 2028 if the projected revenues fail to materialize. Read more at Center Square.

Seattle Democrats are once again expanding their resistance to federal immigration enforcement—this time by reviewing city policies to ensure personal data from residents who use city programs never reaches federal authorities.

The Seattle City Council is expected to approve a resolution directing the city to examine whether additional safeguards are needed to block federal agencies from accessing information about people who participate in Seattle programs.

The proposal comes from Councilmember Dionne Foster, who said the goal is to make sure residents can use city services without worrying their information could end up with immigration authorities.

“This is about reaffirming that people should be able to access city programs and services without worrying about how their personally identifiable information might be used,” Foster said.

But the measure is just the latest move by Seattle officials to insulate the city from federal immigration enforcement.

Mayor Katie Wilson kicked off the effort in January with an executive order blocking U.S. Immigration and Customs Enforcement from conducting enforcement actions on city property. The council quickly turned that order into law and began installing more than 600 signs on city property telling ICE to stay away.

Seattle lawmakers have also approved a one-year moratorium on new or expanded detention facilities in the city as the federal government attempts to increase national detention capacity.

Now Democrats want the mayor to complete a new review by June 30 to determine whether Seattle needs even stronger barriers preventing federal agencies from accessing city-held information.

Councilmember Ron Saka supported the effort but warned the city must also ensure that private vendors handling city data are secure, noting that a cyberattack could expose information the city is trying to shield.

The resolution has already cleared committee and is expected to pass easily when the full council votes March 17.

Critics say the move sends a clear signal: Seattle leaders are more interested in obstructing federal immigration enforcement than cooperating with it. Read more at Center Square.

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