Community Government

Gig Harbor legislators explain why they voted ‘no’ on the millionaires tax

A new state income tax on salaries over $1 million per year received mixed support from Democrats on the Kitsap Peninsula, with detractors opposed to raising taxes on the wealthy without offering more relief to lower-income residents.

Two senators and one representative from the peninsula voted against Senate Bill 6346, which established a 9.9% tax on household income over $1 million. They were among only 11 Democrats in the House and Senate who went against their party in opposing the measure. All Republicans in both houses voted against it.

Democrats boosted tax proposal

Democrats championed the tax. They described it as necessary to balance the state’s tax system, which the nonpartisan Institute of Taxation and Economic Policy considers among the most regressive in the country.

Gov. Bob Ferguson signed the millionaires tax into law on March 30, calling it “a historic day for Washingtonians.” The state was “taking a historic step forward to rebalance an unfair system,” he said.

Republicans argue the new tax will limit business growth and that lawmakers will eventually extend it to other income brackets.

Legislators from the 26th District — from left, Rep. Michelle Valdez, R-Gig Harbor; Rep. Adison Richards, D-Bremerton; and Sen. Deb Krishnadasan, D-Gig Harbor — talk with Gig Harbor Chamber of Commerce President and CEO Miriam Battson on Wednesday, Jan. 7. All three local legislators voted against the so-called millionaires tax. Photo by Vince Dice

“This is a betrayal of the people of Washington and a direct attack on our state’s economic competitiveness,” House Minority Leader Drew Stokesbury said in a statement last month.

Income tax history

Washington previously was one of nine states without a tax on income. Voters approved an income tax in 1932, but the state Supreme Court struck it down as unconstitutional a year later.

Voters have since rejected several variations of an income tax, most recently in 2010.

Assuming it survives expected legal challenges and a possible referendum, the state would begin collecting income tax in 2029. A lawsuit filed on April 9 by Republican former state Attorney General Rob McKenna on behalf of several business owners and organizations argues the tax is unconstitutional, according to the Seattle Times.

The state Department of Revenue projects the tax to generate around $3 billion from about 21,000 taxpayers. Over half of those taxpayers live in legislative districts that are entirely or partially in King County. A spokesperson for DOR said the data was based on a prior version of the law, not what the Legislature ultimately approved, so final results could vary.

The legislation also expands eligibility for the state’s Working Families Tax Credit; raises the income threshold for when a company needs to pay the state’s business and occupation tax; and eliminates sales tax on diapers, over-the-counter medications and hygiene products.

Most of the money collected, however, would go to the state’s general fund — a point of contention for some lawmakers.

Local legislators

“It’s a blank check for the general fund,” Rep. Adison Richards, D-Gig Harbor, said of the tax in a phone interview. Richards represents the 26th Legislative District, covering Gig Harbor, the Key Peninsula, South Kitsap and part of Bremerton.

While Richards acknowledged the state’s tax system is unfair, he said the millionaires tax fell short in offering relief to lower-income earners. The legislation should specifically dedicate revenue for things like education and health care, he said.

Sen. Deb Krishnadasan, D-Gig Harbor, also from the 26th District, expressed a similar sentiment. In an email, she wrote she supports tax reform but argued the priority should be “delivering relief” to working families struggling to make ends meet.

“More could be done to ease the overall tax burden and directly address the rising cost of living,” she said. “While this legislation funds important programs and services, it doesn’t go far enough to provide the substantial, immediate relief working people need.”

Both Richards and Krishnadasan will be seeking reelection in 2026. The third member of the 26 district’s delegation, Rep. Michelle Valdez, R-Gig Harbor, also voted against the tax.

326 from 26th District estimated to pay the tax

In the 23rd District — which covers Bainbridge Island, Poulsbo, Silverdale and part of Bremerton — Sen. Drew Hansen, D-Bainbridge Island, was the lone legislator to vote against the millionaire’s tax. Reps. Greg Nance, D-Bainbridge Island, and Tarra Simmons, D-Bremerton – who also hail from the 23rd – were in favor.

Hansen said in a phone interview he was “not comfortable implementing an income tax” for the first time in state history without “very substantial” tax relief. He did not name a specific change, but said he would have supported alterations to the gas tax or more targeted sales tax relief.

An estimated 346 taxpayers from the 23rd District and another 326 from the 26th District are expected to pay into the millionaires tax, according to DOR estimates. That ranks the two districts as 13th and 14th in the state.