A preview of Washington’s 2026 legislative session

On Monday, Washington state lawmakers will meet in Olympia to kick off a 60-day legislative session. Last month, Gov. Bob Ferguson unveiled a proposed $79 billion supplemental budget that aims to fill a $2.3 billion shortfall in part by tapping the state’s rainy day fund and making cuts to spending on state programs and services.

Lawmakers in both chambers will consider other proposals to shore up the state’s finances, including a contentious plan by Senate Democrats that would impose a nearly 10% tax on Washingtonians making more than $1 million a year. The so-called millionaires’ tax would raise an estimated $3 billion annually, but it faces opposition by Republicans who’ve threatened to sue if it wins passage by the Democratic majority in the Legislature.

Scott Greenstone, a politics reporter at our partner station KUOW and co-host of the Sound Politics podcast, joins us to share more details about that plan and other priorities facing Washington lawmakers during the short session.

Note: The following transcript was transcribed digitally and validated for accuracy, readability and formatting by an OPB volunteer.

Dave Miller: This is Think Out Loud on OPB. I’m Dave Miller. Washington state lawmakers will kick off a 60-day legislative session in Olympia on Monday. They’re facing a multi-billion dollar shortfall for the current two-year budget cycle because of Congress’s One Big Beautiful bill. Democrats are also looking to touch the state’s third rail. They want to institute an income tax. It would be for people who make more than a million dollars a year.

Scott Greenstone is a politics reporter at our partner station KUOW. He is also the co-host of the podcast “Sound Politics‚” and he was also, way back when, a Think Out Loud intern. Scott, it’s a pleasure to have you on Think Out Loud.

Scott Greenstone: Oh my gosh, it’s a full circle moment for me. Thank you for having me.

Miller: OK. Now to the business at hand. I want to start with what seems like the most high-profile proposal that’s gonna be taken up: a new income tax on high earning Washingtonians. What exactly are Democrats pushing for?

Greenstone: They’re calling it a millionaires’ tax. So it would be nearly 10% of all incomes over a million bucks a year. So millionaires’ tax, as you might know, it might be a little bit of a misnomer if you’re a stickler. Millionaires technically have a million dollars in assets, not income. But I don’t know details. Democrats have, for a while, compared Washington’s tax structure to a really wobbly stool. It’s a lot of sales taxes. Your Washington State listeners know this. It’s a lot of property taxes and business taxes to make up for the fact that there is no income tax, that there hasn’t been for almost 100 years. And that means, in the end, that we have what Democrats call a regressive tax system. Poor people pay a bigger percent of their income in taxes than rich people, and they want to fix that.

Miller: Democratic Governor Bob Ferguson pushed against taxes on high earning Washingtonians just last year, pushed against the more progressive members of his own party. What changed?

Greenstone: Yeah, I think a few things. Ferguson came in trying to sell himself as a pragmatist, saying our spending has grown a lot. We can’t rely on raising taxes to get us out of this really serious budget problem that you alluded to at the beginning, that I should say is not only caused by Trump’s H.R.1 Bill in Washington, but by just the fact that our spending has exploded in this state in the last decade-plus.

Ferguson faced a lot of pushback from the progressive wing of the party, as you mentioned, which has grown really strong as Democrats win more and more seats in the last decade. They don’t quite have the supermajority that they have down there in Oregon, but they are creeping closer every year. There’s many young progressive folks who want to see us tax the rich.

I think the governor would also tell you that those taxes he said no to, that he pushed against, were different proposals on global assets of extremely wealthy Washingtonians, and Democrats were really worried that that would be tough to collect – Democrats like him, I should say. They were worried that that kind of tax would be tough to collect and potentially encourage those extremely wealthy Washingtonians to just change their primary addresses to their second, third or fourth homes.

Miller: And the thinking is that the income tax on incomes over a million dollars would be less likely to push people away. That’s his thinking?

Greenstone: I think that is his thinking because he thinks … Well, I don’t want to jump into Governor Ferguson’s head, but what I have heard from people is they think that the ultra-wealthy will be sort of like, “all right, I’ll pay for it.” And the “millionaires” who live in Seattle and things like that are going to be all right with it and not very many of them will leave. This is not a tax that would affect a huge percent of Washingtonians. I think less than 1%, maybe less than 0.5%, depending on what numbers you look at.

Miller: What are Republicans saying about this proposal?

Greenstone: Yeah, the age-old fiscal conservative adage in Olympia, you’ve probably heard it before: it’s not a revenue problem, it’s a spending problem. I was at an event yesterday where John Braun, the state senator from Centralia and the Republican leader in the state Senate, said, we are in danger of getting in the cycle where we raise taxes, the economy drops, revenue comes down, we’re not getting as much tax money. We raise taxes more. I’m paraphrasing, but that would not be good for the state. Other folks like Representative Jim Walsh, who’s the chair of the Republican Party in this state, called the proposal a joke and patently unconstitutional.

Miller: What’s he referring to there?

Greenstone: So like I mentioned, we haven’t had an income tax for almost 100 years. But in 1932, Washingtonians voted for one in huge numbers and the Supreme Court struck it down, because there is this little sentence in the Washington State Constitution saying “all property must be taxed uniformly.” And the Supreme Court, the state Supreme Court, I should say, said, well, that means income, too. Income is property. We are one of the only states in the U.S. that considers income to also be property.

I’m getting really technical here, but essentially that has meant that if you want to put an income tax in, you’ve got to tax everybody absolutely the same. And that’s kind of a nonstarter in Washington state.

Miller: Didn’t Democrats pass a ban on income tax not long ago?

Greenstone: Yes, they absolutely did. That was under pressure, though, from Republicans or conservatives. There was a conservative-backed initiative campaign to basically put it on the ballot if they didn’t pass it into law. And Democrats, in 2024, were facing a really busy ballot. President Trump, then President Biden, on the ballot, all these different things, and they said, let’s leave off the income tax question for now and tackle some other things. Now they say they’re not beholden to that, they can reverse it.

The state Senate leader told me on my podcast “Sound Politics,” last month … he called it “pie crust promises, easily made, easily broken.” So they’re definitely going to overturn that, I think.

Miller: That quote blew my mind because it’s like the exact thing that people say they don’t like about politicians, and here was a politician just saying, yeah, our words didn’t mean much before. It’s flabbergasting.

Greenstone: Well, yes, I was also flabbergasted by it. I think if you step into Senator Pedersen’s mind, in the end what he was maybe poorly phrasing was this idea of the law doesn’t hold us to keep that in forever and we were under pressure. And I will say something that happened in 2024, Dave, as you might remember, as your Washington state voter listeners might remember, is voters in Washington state decided that they actually loved a capital gains tax. So what the Democrats think is that voters actually love an income tax when it is on the rich, not on them.

Miller: So even if this does pass and does withstand a very likely legal challenge, the money would not come in immediately. So let’s turn to the current fiscal questions. How big a budget shortfall are lawmakers looking at for the current biennium?

Greenstone: I’ve seen different numbers on the biennium around $4 billion, but I’m going to talk about what the governor is just describing for this supplemental budget. If you’re not a budget wonk, then this is when lawmakers come back to Olympia, as they are going on Monday, and they tweak the budget that they passed last year because of the biennium. So this supplemental budget, they’re looking at $1.6 billion, according to the governor. And you’re right, the millionaires’ tax, even if it were passed this year, wouldn’t help and might not start helping until 2029, is what the governor said when he said we should do it. So instead, he wants to take money from the Rainy Day Fund and the Climate Commitment Act – the state’s carbon auction – to fill a bunch of holes in the budget, that $1.6 billion.

Miller: What are you hearing from Republicans about how they would like to handle this shortfall?

Greenstone: They’re not being so specific on what they would cut. But to go back to State Senator Braun from Centralia, he talked about another sort of classic Republican approach, which was, in Washington state at least, the priorities of government. What should government do? And I think he used the term, we medicate, we incarcerate and we educate. So they basically say, do those things first – health care, law enforcement, education, and then cut everything after. I mean, they’ve brought up that Washington state employees have gotten raises in recent years and they would like to see those kind of curtailed, I think.

Miller: So we’ve talked a lot about taxes and budget, but what policy bills are you paying attention to and expecting in the next two months?

Greenstone: One that I already think is looming, though it hasn’t been totally certified yet, I brought up the initiatives from 2024. Washington state voters will remember those four state initiatives at the top of their ballot, asking them a bunch of questions about capital gains tax and the Climate Commitment Act. There’s two more of those coming. And Democrats have to decide again whether they want to pass them into law, like they did with the income tax ban I talked about a minute ago, or if they want to send them to the voters, like they did with the capital gains tax that I also mentioned. Those two initiatives though are incredibly controversial.

The less controversial one would give parents access to a lot of school curriculum, but particularly, it would codify their right to see school counseling records, mental health counseling records for teens, which they aren’t currently privy to. And LGBTQ advocates say that could out kids, gay kids, queer children, who come out to their school counselor, but don’t want to come out to their parents. And then the other one, and this is the really, really controversial one, would seek to keep trans girls out of girls’ sports in Washington state by requiring every person who wants to participate in a girl’s sport in the state to provide a doctor’s note or some sort of proof of their biological female anatomy.

Miller: Is it fair to say broadly right now, when you’ve been talking to lawmakers, that both Democrats and Republicans are focused on affordability or addressing affordability?

Greenstone: Oh yeah, well, I would definitely say they’re talking about it despite President Trump’s “affordability is … ” What did he call it? Can’t remember if he called it a hoax, a scam or whatever, the new Democrat word. But I just heard, I’m going to bring up Senator Braun again, he said it like three or four times in a row. And yes, Republicans are saying Washington state isn’t affordable because you’re putting in all these fees, people are paying more in taxes and property taxes and all these things. And the Democrats are saying, let’s make Washington state affordable for the people who can least afford it, folks who need help with childcare, folks who need help with food stamps, things like that. So yes, I would agree with that assessment.

Miller: Democrats in the legislature, based on your reporting, are also talking about redistricting. This is obviously in the context of the national arms race of redistricting in Texas and California, but it’s complicated in Washington. Can you give us the overview?

Greenstone: I would actually say it’s not that complicated [Laughter] because the sponsor of the bill, Representative Joe Fitzgibbon, a Democrat who is the majority leader, told me it’s not going to pass, it’s not gonna happen. And he’s the one who sponsored the bill. So in that way, it’s not complicated. But here’s how it is. You are correct that in some ways it is. The reason it’s not going to pass, the reason Washington state is not going to draw its congressional districts to look completely different so Democrats can win one or two more seats, is because to do that, they would need two-thirds of the vote in the legislature. And as I mentioned, they’re getting closer each cycle, but they’re not there yet. And they would need some Republicans to vote for it, and then they would need to put it to the people and it would need to pass a vote.

So it’s not happening this year. But the reason that Joe Fitzgibbon, the Democratic majority leader, introduced it was to get people talking about what Democrats could do if they had a supermajority like they have in Oregon.

Miller: Let’s turn to some other issues. New York’s new Democratic Socialist mayor, Zohran Mamdani has gotten a lot of national attention, but Seattle just swore in its own new Democratic Socialist mayor. What should people in the Northwest know about Katie Wilson?

Greenstone: Well, insert some joke here about both Portland and Seattle having a Mayor Wilson. Can we do that? I didn’t come up with the joke beforehand, but …

Miller: Two K. Wilson’s.

Greenstone: Two K .Wilsons.

Miller: That’s not a joke. It’s just an alphabetical reality. [Laughter]

Greenstone: Yeah, people will call her the PNW’s Mamdani and she does not shy away from that. She told me on my podcast yesterday on “Sound Politics” that even though she is a socialist, she’s managing a capitalist economy. So she’s trying to really telegraph, what would you call it? Pragmatism. She has hired people and put people on her transition team that are from downtown Seattle’s business community and the stadium district, even people who donated to her opponent. In fact, her deputy mayor donated to her opponent, and then she hired him to run City Hall.

So, she has basically said she has a “sewer socialist mentality.” And that’s like an old phrase, but it basically means, we got to make sure the government runs well. People have to trust us to fill the potholes and basically keep the sewers working before they trust us with the big stuff, right? So that’s the kind of focus that she is pushing forward in this first month. She’s been in office nine days as of right now.

It’s not a big ideological sort of takeover. One of her advisors told me or said on “Sound Politics” … Sorry, I keep quoting my own podcast …

Miller: You’re very good at that.

Greenstone: Sorry, sorry. [Laughter] I just have to say this because it’s so funny. He said “there aren’t going to be guillotines in Pike Place Market.” It’s just a good quote. It’s not going to be an uber-ideological administration, at least that’s what they’re saying.

Miller: OK, so what do you see then as the big questions, though, looming over her first year as mayor?

Greenstone: She promised to build a lot of housing to bring down costs, and that is hard. It’s even harder, I think, in Seattle maybe than it is in Portland. And the rental prices have just stayed really high here. So she’s going to need to navigate this. We’re finishing up our planning, trying to decide at the city of how much we want to expand our neighborhood centers and how high we want to allow buildings to go in many parts of the city.

She’s a big supporter of social housing, which is something that we are trying right now and about to sort of embark on taxing big companies that pay executives a lot of money or employees a lot of money. We’re taxing them to build housing that is mixed income, both poor folks and sort of middle income folks renting in the same building. If she can’t get those projects off the ground, and maybe even if she can, rents aren’t going to come down and people will, hypothetically, not reelect her. Seattle has not reelected a mayor for 20 years and she’s got to have that on her mind.

Miller: Scott, thanks so much. It is a pleasure to have you as a guest on Think Out Loud.

Greenstone: It’s such a pleasure to be here. Thank you so much.

Miller: Scott Greenstone, former TOL intern, is now a politics reporter at KUOW; co-host, in case you did not know this, of the KUOW podcast “Sound Politics,” which would be a great podcast to listen to after or alongside you’re listening to “OPB Politics Now,” which is OPB’s politics podcast.

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