Washington lawmakers raise taxes, pass budget, adjourn

Published 3:52 pm Monday, April 28, 2025

OLYMPIA — Washington Democrats raised taxes on fuel, property, businesses, capital gains, estates, recreation, Tesla and more, then adjourned April 27 after passing a two-year, $77.9 billion operating budget.

Revenue bills to support the spending plan were revised and voted on faster than state agencies could update estimated impacts. Senate Republicans, who opposed the budget, said the budget relies on $12.5 billion in higher taxes over four years.

The total doesn’t include revenue from higher taxes on gas, diesel and other transportation-related necessities, such as driver’s licenses and tires. Nor does it include a 38% increase in hunting and fishing licenses, or a 50% increase in annual passes to state parks.

Democrats said the tax increases were necessary to balance the budget and that just cutting spending would devastate education and social services.

Gov. Bob Ferguson, who has the power to veto sections of the budget, said he appreciated that lawmakers didn’t raise taxes by more, but said he will carefully review the tax increases they did pass.

“When that review is complete, I will share my thoughts with the public in greater detail,” he said in a statement.

The top-ranking Republican on the House Appropriations Committee, Rep. Travis Couture, R-Allyn, said the budget was bloated, irresponsible and destructive.

Couture criticized some spending, such as $4 million for legal services for illegal immigrants and $300,000 to study reparations for descendants of slaves. He complained Democrats taxed, “everyday joys,” like hunting, fishing, visiting state parks and liquor.

“No part of life is safe,” he said in a statement. “This budget is a gut punch to working people.”

The gas tax will rise 6 cents a gallon to 55.4 cents on July 1. The tax on diesel will rise by 9 cents a gallon to 58.4 cents on July 1 and to 61.4 cents a gallon on July 1, 2027. The gas and diesel taxes automatically will increase by 2% every July 1.

An increase in the capital gains tax will impact taxpayers with more than $1 million in capital gains in a year. A hike in estate taxes will impact heirs to estates worth more than $3 million.

Late in the session, Democrats introduced a bill to tax zero-emission vehicle credits. Tesla, is the only company that will owe the tax, which is expected to raise $281 million over four years.

Tesla accumulated the credits by selling electric vehicles in Washington. Other car makers have to acquire the credits from Tesla to meet the state’s electric-vehicle mandate.

“We never intended for this program to be a source of windfall profits from one manufacturer,”  the bill’s sponsor, Rep. Joe Fitzgibbon, D-West Seattle, said.

Republicans said Democrats were double-crossing Tesla, headed by Elon Musk, the face of President Trump’s campaign to reduce federal spending.

“We wanted people to buy electric vehicles. They’re buying them, and this company has done very well and now we’re going to penalize them,” Sen. Nikki Torres, R-Pasco, said.

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