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Inside Olympia: Key Legislators Talk Taxes, Plus a Conversation with State Treasurer Mike Pellicciotti

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A key legislative Democrat called this week for new tax revenues to help balance the state budget, despite newly inaugurated Gov. Bob Ferguson saying taxes should be a “last resort.” Interviewed by Austin Jenkins this week on Inside Olympia, House Finance Chair April Berg (D-44th) said the path to closing a multi-billion dollar budget shortfall will need to include a combination of cuts and revenues.

Berg acknowledged that there is currently “daylight” between legislative Democrats and Ferguson, a fellow Democrat, on the issue but expressed confidence that the new governor will move in their direction. “I think some of that daylight comes from the newness and regardless of what your chess rating is, there’s always something to learn,” Berg said, referring to Ferguson’s rating as a chess master. 

By contrast, Representative Ed Orcutt (R-20th), the committee’s ranking Republican, argued that Washington’s budget problem stems from overspending, not insufficient revenue. “Our revenues continue to grow at three to four percent,” Orcutt said. “The issue is that we’ve outspent our revenue. We don’t need additional taxes; we need to rein in spending.”

One of the most sharply debated proposals is a wealth tax aimed at the state’s ultra-wealthy. Inslee supported the idea, but Ferguson, who was sworn in on January 15th, has expressed skepticism. Berg, too, voiced reservations about the specifics of Inslee’s wealth tax proposal. Orcutt is strongly opposed to a wealth tax, arguing that it would discourage investment and harm the economy: “Stocks aren’t just sitting there; they’re being invested and keeping our economy strong.”

The state’s fiscal health is also a concern for State Treasurer Mike Pellicciotti, particularly as the state faces potential disruptions in federal funding under the Trump administration. With Washington receiving over $27 billion annually from federal sources, Pellicciotti underscored the need for fiscal resilience, urging collaboration among the legislature, governor, attorney general, and his office to safeguard the state’s financial stability.

Pellicciotti cited recent comments by the new head of the White House Budget Office. “He believes the President has the authority to essentially send less than Congress appropriated. That’s not how that works, by the way. We follow the law, and that means we need to be preparing as a state of Washington for an administration that might, on a whim—based on a random tweet at 4 a.m. from our president—simply try to deny federal funding to states like Washington…..”