As Shift WA readers know, this November, Washington voters will decide whether to approve I-645, which would repeal the state’s new 9.9% income tax on income above $1 million. In a recent op-ed, The Mountain States Policy Center’s Jason Mercier argues the tax is particularly controversial because Washington’s Supreme Court has repeatedly held that this type of income tax is unconstitutional without a constitutional amendment.

The Legislature passed the tax as a regular statute and attached an emergency clause preventing a referendum. Opponents instead gathered signatures to put I-645 directly before voters. Mercier notes that Washington voters have rejected 10 consecutive income-tax proposals.

Mercier also questions assurances that the tax will remain limited to millionaires. He points to the sponsor, Sen. Jamie Pedersen, previously describing the state’s statutory ban on income taxes as a “pie crust promise” that lawmakers could amend whenever they wanted. He argues that history shows income taxes can begin with narrow exemptions before expanding to additional taxpayers.

Business leaders are also raising concerns. The Association of Washington Business says the tax would eliminate one of Washington’s remaining competitive advantages and increase costs for businesses, particularly pass-through businesses such as S-corps. An AWB employer survey found that 45% of respondents expected the new income tax to affect their businesses.

Mercier also argues that claims the tax is necessary to fund current government services overlook the timeline: the tax is not scheduled to take effect until 2028, with revenue beginning in 2029. Lawmakers therefore have several years to plan future spending without relying on the new tax.

Mercier’s central argument:  I-645 would give voters an opportunity to restore Washington’s long-standing no-personal-income-tax model while the tax itself continues to face constitutional challenges. Read more at The Center Square.

Washington’s Department of Labor & Industries wants to raise workers’ compensation rates an average 4.9% in 2027, blaming rising costs for wages and medical care.

The bigger problem? Washington employers don’t have anywhere else to shop.

Washington is one of just four states that bans private insurers from selling workers’ comp coverage. Most businesses are stuck buying through the state-run system, meaning they can’t shop for lower rates, better claims service or faster return-to-work programs.

L&I can call another increase modest, but employers are already buried under Washington’s growing pile of taxes and mandates.

As the Washington Policy Center points out, the solution isn’t another rate hike. Open the market to private insurers and let competition do what government monopolies can’t. Read more at The Washington Policy Center.

Public Lands Commissioner Dave Upthegrove has quietly trimmed 22,000 acres from his signature forest conservation plan, reducing the amount of state forestland removed from the logging rotation from 77,000 acres to about 55,000.

Upthegrove blamed the reduction partly on mapping errors, including parcels that were already protected or were tiny pieces of land. The remaining 55,000 acres are protected from harvest only through 2030 unless lawmakers give DNR new tools.

And that’s where things get interesting.

Upthegrove now wants the Legislature to help DNR generate revenue from forests without actually harvesting the timber—including conservation leases, easements and carbon markets. DNR has been pushing similar ideas for more than 20 years, but lawmakers rejected the proposal last year.

Meanwhile, DNR is already struggling to meet its timber targets. The agency harvested 388 million board feet last fiscal year against a 460-million-board-foot target, while the account funding forestry operations was on track to go negative.

So Upthegrove is protecting less forest than he originally promised, harvesting less timber than DNR promised, and now wants lawmakers to find another way to replace the revenue. Read more at Seattle Red.

Seattle’s minimum wage will jump from $21.30 to $22.14 an hour on Jan. 1, 2027—a mandatory 84-cent increase with no City Council vote and no small-business exemption.

That’s a 3.9% increase, and it widens Seattle’s already sizable gap with nearby cities. If the projected statewide minimum wage hits $17.73, a Seattle worker will make about $4.41 more per hour than someone doing the same job in Bellevue.

For restaurants operating on razor-thin margins, another labor increase can be a serious hit. The additional 84 cents costs roughly $1,747 per full-time minimum-wage employee each year, before payroll taxes. Ten employees means about $17,500 more annually.

That’s especially painful when the Washington Hospitality Association says a typical $1 million restaurant clears only around $16,000 in annual profit.

So Seattle’s next minimum-wage increase could cost a small restaurant more than its entire yearly profit—before the owner pays for rent, food, utilities, insurance or anything else.

And customers shouldn’t expect the bill to stay with the owner. Restaurants have already been raising menu prices, adding service charges and cutting costs to survive. Read more at Seattle Red.

Rep. Pramila Jayapal claimed I-645 would give millionaires and billionaires a $300 billion tax break while cutting K-12 social programs. Seattle Red’s Jason Rantz points out how the claim falls apart when compared with Washington’s own numbers.

According to the state Office of Financial Management, I-645 would reduce state revenue by $11.4 billion over five fiscal years—roughly 26 times less than Jayapal’s $300 billion figure. Of course, the tax has not yet collected any revenue, meaning repealing it would not directly eliminate funding for programs currently being paid for.

Rantz exposes Jayapal’s claim that working families pay three times more than the top 1%. The figure comes from Institute on Taxation and Economic Policy data measuring taxes as a percentage of income—not total dollars paid. Using ITEP’s figures, Rantz calculates that the average household in the bottom fifth pays roughly $2,570 annually in state and local taxes, compared with about $85,200 for the average top-1% household.

Rantz also points out hoe Jayapal’s claim that I-645 would force cuts to school programs ignores the fact that lawmakers have already incorporated anticipated future income-tax revenue into budget projections. The initiative would preserve other tax credits and spending provisions, including the expanded Working Families Tax Credit.

Finally, Rantz highlights the campaign money behind the measure. He notes that the No on 645 campaign has raised substantially more than the repeal campaign, with major contributions from public-sector unions including the Washington Education Association, SEIU and Washington Federation of State Employees.

Ultimately, Jayapal’s $300 billion figure is wildly disconnected from the state’s own estimate, her “three times more” claim relies on a percentage comparison is misleading, and the union-backed opposition has far more financial backing than the repeal campaign. Read more at Seattle Red.

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