Washington Governor Bob Ferguson said he wouldn't sign a budget that relies on the wealth tax proposed by his fellow Democrats in the state legislature.
House and Senate budget proposals "both rely on a wealth tax which is novel, untested and difficult to implement," Ferguson told reporters in Olympia Tuesday. "They need to immediately move budget discussions in a different direction."
Ferguson said the state is facing a $16 billion budget deficit over the next four years, which will be exacerbated by cuts in federal funding by the Trump administration. Democrats in the Washington State Senate proposed a 1% tax on the stocks, bonds, exchange-traded funds and mutual funds held by people with more than $50 million of those assets. House Democrats are considering a similar measure.
That would make Washington the first state in the U.S. to tax its residents' wealth. The bill's sponsors say that including only publicly traded assets would address some of the concerns that the state's Department of Revenue raised in a November
Ferguson did leave open the possibility of a small wealth tax that raises no more than $100 million, just to test the legality of the proposal.
"We cannot rely on a revenue source with a real possibility of being overturned by the courts," Ferguson said.
Some wealthy people have already left Washington since the state passed a 7% tax on capital gains, which was first collected in 2023. Tax attorneys and wealth managers say that even the discussion of a new tax on financial holdings is already encouraging more people to leave the state.
Speaking in a state Senate hearing on Monday, Rian Watt, executive director of Washington progressive
