WA leaders mull raising taxes amid deficit

Facing a budget shortfall of $10 billion or more, Democratic leaders in the state Legislature are already talking about potentially raising taxes to forestall cuts to government services.

But Gov.-elect Bob Ferguson says he’s not ready to back tax increases just yet.

In an interview with The Seattle Times at a North Seattle coffee shop Thursday — his first extensive sit-down since winning the gubernatorial race — Ferguson said he’s scouring state government looking for ways to cut spending before considering taxes.

“We are looking at savings, efficiencies, how we can do better as a state. That’s the first, second and third conversation as far as I am concerned, before even entertaining anything else,” Ferguson said.

Ferguson, who arrived for the hourlong interview without any entourage, also emphasized he’s serious about his campaign promise to hire more police throughout the state and said he’s carefully planning for how to respond to the incoming administration of President-elect Donald Trump on issues including the promised use of the military in mass deportations.

The 59-year-old Democrat, who has served as attorney general since 2013, defeated Republican opponent Dave Reichert in the Nov. 5 election, winning 55.5% of the vote.

Since then, he’s appointed a 53-member transition team of union, tribal and business leaders, Democratic and Republican legislators and others, asking them for recommendations for an agenda focused on his first 100 days as governor.

The transition team includes a subcommittee asked to look for ways to reduce state spending, co-chaired by state Sen. Mark Mullet, D-Issaquah, who battled with Ferguson in the gubernatorial primary, and Rachel Smith, CEO of the Seattle Metropolitan Chamber of Commerce.

“We do not have a subcommittee on revenues,” Ferguson said. “Specifically at the transition team, I made clear that’s not a part of the conversation.”

Ferguson’s cost-cutting exercise is no declaration of a desire to deeply slash government like Trump’s “Department of Government Efficiency” effort at the federal level, headed by entrepreneurs Elon Musk and Vivek Ramaswamy.

Still, Ferguson said he’s been doing his homework on state government, studying the dozens of state agencies he’ll soon lead — and even questioning whether all of them should exist.

“There is an agency — not the biggest agency in the world, but I was like, ‘Why do we have this agency?’ “ Ferguson said he thought after looking at descriptions of one state office.

He declined to identify the agency but said he called two of his top aides and asked them to contact the office and get “a better explanation of why they exist” and whether they can get by with “far, far fewer employees.”

A transition spokesperson also declined to identify the agency Ferguson was referring to in response to follow-up questions.

Ferguson said he hasn’t made any decisions on the future of that agency or others. But despite being the latest in a four-decade run of Democratic governors, he insists he’s willing to rock the status quo in the Capitol, as he did in the 2000s when he sided with Republicans as a Metropolitan King County Council member and cut the size of the council from 13 to nine members.

“For me, there is not some sacred cow,” he said.

Ferguson cautioned he’s not ruling out tax increases and acknowledged Democratic lawmakers will have their own proposals he may have to grapple with.

Some top state House and Senate Democrats have publicly signaled they’ll pursue additional taxes, emboldened by the November election results in which voters mostly rejected a slate of antitax initiatives, while also handing Democrats every statewide elected office and slightly larger legislative majorities.

One option being floated is a tax on high salaries paid by large corporations, similar to Seattle’s JumpStart tax. Another is a “wealth tax” on the richest state residents.

“I am looking at a lot of options that check the box of meeting community needs while also making the tax code more progressive,” said state Sen. Noel Frame, D-Seattle, vice-chair for finance on the state Ways and Means Committee, in an interview confirming those options and others will be examined by lawmakers who want to preserve programs such as expanded child care subsidies.

Frame said she and state Rep. My-Linh Thai, D-Newcastle, will again introduce their wealth tax proposal targeting stocks and bonds and other financial assets of the very wealthy, which has been proposed for the past two sessions but did not advance.

In the interview, Ferguson declined to say whether he would support or oppose that proposal or others suggested by other legislators.

The state faces a budget shortfall between expected revenues and expenses of between $10 billion and $12 billion over the next four years, driven by tax revenues coming in below recent high-water marks and by decisions from majority Democrats to boost spending on an array of programs.

Outgoing Gov. Jay Inslee recently imposed a freeze on state hiring and nonessential contracts and travel in response to the looming deficit. Inslee will offer his final budget plan Dec. 17 before leaving office in January.

In the interview, Ferguson also was noncommittal on some top legislative priorities of progressive Democrats and their allies, which may wind up on his desk for a signature or veto in the next several months.

That includes a bill giving striking workers access to unemployment benefits, which passed the state House last year. “I will carefully consider it if the Legislature passes it. I made no commitment on that to anybody,” he said.

Similarly, Ferguson didn’t commit in the interview to supporting a bill to cap annual rent increases — another proposal that passed the state House last year but died in the Senate. However, he has directed his transition team’s housing subcommittee, led by Lt. Gov. Denny Heck, to come up with a recommendation on “a balanced law that prohibits predatory rent increases.”

During his gubernatorial campaign, Ferguson promised to reverse a slide in police hiring in the state, which for more than a decade has ranked dead last in the country for officers per capita. He pledged a $100 million grant program to help cities and counties recruit more officers.

That promise, featured in multiple TV ads, drew derision from Ferguson’s political rivals, who pointed out he had not made police hiring a priority during his dozen years as attorney general.

But in the interview, Ferguson said he’s determined to follow through as governor. He won’t be satisfied with merely proposing a plan and then walking away.

“We are really going to do this,” he said, saying he’s told legislative leaders “it’s going to need to happen.”

As he faces tough issues in Washington state, Ferguson will also have to contend with a second Trump administration, and another subgroup of his transition committee has been asked for ways to prepare for the “Project 2025” agenda from Trump allies, including mass deportations.

Ferguson, who sued the first Trump administration nearly 100 times as attorney general, said he’s asked for careful legal briefings on the extent and limits of the federal government’s authority, including the potential use of the National Guard in mass deportations.

Ferguson said he has “no problem” with deportations of “individuals who are criminals” under existing policies and law, and acknowledged the president has broad legal authority on immigration. But he said he’s preparing for if Trump pushes past legal boundaries.

“Our job is to make sure that the federal government is adhering to the law when carrying out any activity that impacts Washingtonians,” he said.

Ferguson is scheduled to be sworn in as governor Jan. 15, two days after the 2025 Legislature convenes.