(The Center Square) The Pasco City Council passed a resolution Monday formally opposing Washington state’s new 9.9% income tax on annual earnings over $1 million, and officials may go even further to ensure a similar provision doesn’t happen locally.
The measure declares the council’s opposition to state and local income taxes after Gov. Bob Ferguson signed the new income tax into law in March, who argued that it would address a regressive tax structure.
Public records uncovered by The Center Square show the tax was part of a plan to overturn nearly 100 years of precedent prohibiting progressive income taxes.
Critics argue that overturning the 1933 ruling could eventually allow the state’s Democratic majority to impose income taxes on everyday earners in the future.
Councilmember Leo Perales said he brought the resolution forward so that the voters could have a say.
“We need to provide a procedural barrier, hurdle if you will, if, for instance, the city in the future wants to implement a local income tax,” Perales said Monday night. “We’ve seen the state of Washington take a kind of ‘left turn’ in regards to income tax policy, from the capital gains tax to the millionaires tax.”
The Pasco council directed City Manager Harold Stewart to send copies of the resolution to Olympia for Ferguson and state lawmakers representing the area. It followed Pasco’s 2022 resolution, which joined more than two dozen jurisdictions in opposing local income taxes after Seattle approved one in 2017.
City Attorney Daniel Kenny said Pasco’s resolution will not bind future council actions, despite Perales’ wishes and said Monday’s vote was “merely symbolic.” However, he said that if they adopt a separate ordinance as Perales had suggested, Pasco would need to repeal it before it could ever pass a local income tax.
“Implementing that tax would take [council] action, and so it would be just kind of folded into that, so it wouldn’t actually be a barrier,” Kenny said, responding to a question from Perales, “but yes, you are correct, [the ordinance] would be in place; it would need to get out of the way if that were to happen.”
Councilmember Joe Cotta expressed support for Monday’s resolution and for an ordinance that would impose procedural barriers should the city ever try to impose a local income tax. He argued that city leadership should use every opportunity to express opposition to the governor over state tax policies.
Offering another perspective, Councilmember Mark Figueroa said the dais needs to consider how the state “has one of the most regressive tax systems.” He argued that low- to middle-income families pay a larger percentage of their earnings than the highest earners, despite ultimately paying less in total.
“They do pay a much larger share of what they earn, and I think that that’s unfair,” Figueroa argued on Monday. “So, as we continue to have these conversations about the tax system that we have, we should definitely look at that angle as well, because I believe that we should have a fair tax structure.”
Figueroa voted in favor of Monday’s resolution, but said that he wanted his sentiments on “the record.”
Mayor Charles Grimm took a moment to read the resolution to everyone before the council ultimately approved the formal declaration of opposition to state and local income taxes and sent it to Olympia.
“Expanding reliance on personal income taxes, whether imposed by the state or authorized by local governments, may discourage private investment, business expansion, workforce attraction, and long-term economic development within communities such as Pasco,” according to Monday’s resolution.
City staff plans to return at a future meeting with an ordinance that would create a procedural hurdle.