East King Chambers Align on Budget, Taxes, and Housing at January EKCC Meeting

With Washington’s 2026 legislative session already underway in Olympia (a 60-day “short session” running January 12–March 12, 2026) , leaders from the East King County Coalition of Chambers (EKCC) met on January 22 to compare notes, track fast-moving proposals, and align on a coordinated advocacy approach for Eastside employers.

The conversation reflected the reality of a compressed timeline: budget decisions are developing quickly, multiple tax ideas are in play, and housing proposals could shape local growth and investment for years to come.

Key takeaways from the meeting

• Budget pressure is driving policy discussions, including transfers, one-time resources, and new revenue concepts.
• Business community concerns are rising around “stacking” new taxes on top of recent changes.
• Housing legislation remains active, with attention on condo reforms, impact-fee timing, and residential development in commercial/mixed-use zones.
• EKCC chambers are prioritizing real-world business impact stories to ground the policy debate in on-the-ground outcomes.

Budget outlook: Shortfalls, one-time fixes, and tough choices ahead

Bellevue Chamber contract lobbyist Lyset Cadena opened with a budget overview and the challenges lawmakers are navigating this session. The theme: Washington is working through near-term fixes while grappling with longer-term structural gaps.

Cadena described a mix of reductions, delays, and one-time resources used to close a shortfall, including drawing from reserves. That aligns with broad reporting that state leaders are confronting a budget gap on the order of roughly $2.3 billion this session.

As lawmakers draft competing budget proposals, EKCC members emphasized the importance of maintaining a stable climate for employers—especially given uncertainty about what comes next in the out-years.

Payroll expense tax proposal draws concern

A proposed state-level payroll expense tax (discussed in Olympia as a tax on payroll above a threshold) was flagged as a significant concern for employers—particularly because of how it could interact with existing local taxes. One such proposal is framed as an excise tax on large employers’ payroll expenses above the Social Security wage threshold.

High-earner tax framework continues to evolve

Members also discussed an evolving high-earner (“millionaires”) income tax concept, with key implementation questions still shifting (including treatment of real estate, pass-through entities, and filing thresholds).

“It actually starts by levying the 9.9% flat tax on all Washingtonians, and then it creates a standard exemption of a million dollars.” — Joe Fain, CEO of the Bellevue Chamber

Other tax items mentioned

The group also noted other tax discussions that could reemerge quickly during the session, including:

• A margins tax idea (often discussed as a possible alternative structure to B&O),
• Potential changes to the estate tax, and
• Renewed attention on certain sales tax exemptions, including those affecting data centers.

Because bill language and fiscal assumptions can change rapidly in a short session, Bellevue Chamber will continue tracking proposals closely and sharing updates as they move.

Housing and land use: Condos, impact fees, and residential in commercial zones

Housing remains an active policy area in 2026, even as priorities shift from major “headline” reforms to targeted changes that can influence production and cost.

Condo reform remains on the radar

Cadena flagged ongoing activity related to condominium policy—an area often tied to ownership opportunities for first-time buyers and downsizing households.

Impact fees and project timing

EKCC also discussed impact-fee timing and how it affects project feasibility. SB 5614 is one bill in play this biennium focused on impact fees. Discussion included the concept of deferring payment until certificate of occupancy—an approach some stakeholders view as a way to reduce financing pressure during construction.

SB 6026: Residential development in commercial and mixed-use zones

A key land-use bill noted was SB 6026, which addresses residential development in commercial and mixed-use zones. The proposal has generated significant city interest and debate, including questions about timelines, corridor planning, and local flexibility.

For Bellevue and the Eastside, this conversation is practical: changes to mixed-use and commercial corridors affect business districts, redevelopment opportunities, infrastructure planning, and the long-term balance of jobs and housing.

Next step: Chamber Day in Olympia (Feb. 18)

EKCC chambers are coordinating outreach around East King Chambers Coalition: 2026 Chamber Day on Wednesday, February 18, 2026.

What businesses can do now

If your business is being affected by state policy, directly or indirectly, your story matters. Here are a few high-impact ways to engage:

• Share a specific example (project delay, hiring change, expansion pause, unexpected cost increase).
• Quantify impacts where possible (jobs, timelines, added costs, reduced services).
• Participate in coordinated outreach through your local chamber and EKCC.
• Join Chamber Day on February 18 to connect directly with legislators.