Business leaders react to final state budget

Joint Statement on Passage of Largest Tax Increase in Washington State History 

OLYMPIA, WA — In response to the conclusion of the 2025 legislative session, the Association of Washington Business, Bellevue Chamber of Commerce, Seattle Metropolitan Chamber of Commerce, and Washington Roundtable today issued the following statement in strong opposition to the passage of the largest tax increase in Washington state history: 

We are deeply disappointed by the Legislature’s decision to approve nearly $9.4 in state and $3 billion local, for a total of over 12 billion in tax increases—an unprecedented move that comes at the worst possible time for working families and local employers. 

As Washingtonians struggle with rising inflation, affordability challenges, and economic uncertainty, these massive tax hikes—as much as 400% in some sectors -- will hit hard on small businesses and the communities they serve. Childcare providers, assisted living centers, repair shops, wholesale groceries, and other local retailers already operating on thin margins will now be faced with the choice to raise prices, cut jobs, or close their doors. 

“The legislators are voting on these tax increases, and can’t even tell us how big they are,” noted Joe Fain, President and CEO of the Bellevue Chamber of Commerce. “Best estimates point to nearly $2,000 per year for a family of four. Every aspect of life in Washington is about to get more expensive. While some in the legislature might claim they are helping working families, they are actually doing irreparable harm.” 

Steve Mullin, President of the Washington Roundtable, added: “Washington is ranked 47th in the nation for affordability – we are almost the worst state in the country for affordability. This is a crisis, and it is absurd for any legislator to suggest that the largest tax increase in state history is not going to make that affordability crisis even worse.”

“It’s just common sense – you can’t make things more affordable by making them more expensive,” said Kris Johnson, President of the Association of Washington Business. “These costs simply can’t be absorbed by businesses—they will be passed on to consumers in the form of higher prices for everyday goods and services.” 

Rachel Smith, President and CEO at the Seattle Metropolitan Chamber of Commerce, cautioned that legislators should not follow Seattle’s lead when it comes to raising significant new business taxes: “The fact that the city of Seattle’s business tax revenues are down and falling – even before harmful economic actions from the federal government like tariffs – is a cautionary tale, but clearly not one being heeded in Olympia.”

Contrary to claims of a budget “shortfall,” state revenues are rising. The true challenge is not that taxes are too low, it’s that spending is too high – and simply unsustainable. State spending has doubled over the last decade, yet Washingtonians are not seeing meaningful improvements in public services like education, housing, or safety. 

These extreme tax hikes send the wrong message to employers: grow your business, and you’ll literally pay for it. At a time when job creators need certainty and support, the state is punishing growth and innovation. 

We urge lawmakers to reverse course and adopt a more fiscally responsible approach—one that prioritizes responsible spending, cuts waste, and focuses on long-term sustainability rather than pushing historic tax burdens onto families and small businesses.

Washington can and must do better.