Budgets & Results: Are higher taxes getting results?

Panelists agreed the Legislature’s latest tax package reflected policy priorities rather than unavoidable math, and despite growing revenues, spending decisions elevated the baseline and set the stage for new taxes to fund additional initiatives.

“They did NOT need to raise taxes to fund current existing services this year.” — Emily Makings, Washington Research Council

Makings outlined how last biennium’s appropriations raised the starting point for the current budget, since even with expected growth in existing tax sources, the maintenance level was projected to outstrip resources. Lawmakers then layered on significant new spending, precipitating the need for tax hikes:

• Estimated maintenance-level shortfall entering 2025: $8.6 billion
• Savings identified over a five-year outlook: $7 billion
• Additional new spending sought: “8+” billion
• Reported tax increase package: $9 billion

The discussion then turned to performance tracking, particularly around emissions. The panel highlighted gaps in timely reporting and questioned the cost-effectiveness of some state programs funded by the Climate Commitment Act (CCA).

“There are programs in there that spend $100,000 to reduce one metric ton of CO2. I get those for $10 per metric ton.” — Todd Myers, Washington Policy Center

Myers noted state law requires updated reporting of Washington-based CO2 emissions, yet the most recent data available are from 2021, with 2022–2023 data not expected until the end of next year. He added that the CCA has collected more than $4 billion, but state reports show wide variation in cost per ton.

• EV incentive program budget: $45 million
• Estimated transportation CO2 reduction from that program: 0.03%
• Latest reported statewide emissions data: 2021 (2022–2023 due end of next year)
• CCA proceeds to date: More than $4 billion

Washington’s higher education model — without a statewide coordinating commission and with 40 public institutions funded on a relatively even per-student basis — was described as unique and increasingly strained.

Riley contrasted Washington’s approach with states that made hard choices a decade ago, prioritizing core missions and aligning funding with return on investment. He cited recent across-the-board cuts in higher ed, partial state funding of mandated raises, and tuition caps that limit flexibility, especially at the state’s research anchors.

Panelists also acknowledged substantial increases in K–12 spending following court-driven reforms, while student outcomes have lagged. They pointed to other states that improved by refocusing on foundational skills.

“You just have to make choices on what you’re going to spend your money on, and throwing more money at it is, in this instance, not going to solve the problem.” — Chris Riley, WSU

Myers cited national assessments showing Washington’s rankings slipping in math and reading over the last decade, despite increased per-student spending after inflation. He also described outdated state report cards and removed performance targets, raising concerns about transparency.

• Reported increase in per-student funding (after inflation): ≈ 40% over a decade
• National assessment trends cited: Declines in math and reading rankings
• Teacher pay noted: Third highest in the nation (per a cited WalletHub analysis)
• OSPI data concerns: Last posted data from 2018–2019; 2027 targets reportedly removed

Panelists warned that cumulative tax changes risk eroding Washington’s business climate, especially when layered atop rising operating costs and ongoing regulatory complexity.

“In Washington, businesses do pay about half of all state and local taxes.” — Emily Makings, Washington Research Council

Makings flagged the session’s breadth of increases, noting that the expanded sales tax on services often falls on business inputs, raising per-employee costs. She also emphasized the need to scrutinize spending and prioritize within existing revenues to restore fiscal balance and competitiveness.