The Education of Bob Ferguson, Back on the Left

A year ago, Bob Ferguson opened his tenure as governor with a Republican-sounding speech that actively pissed off many leaders of the Legislature’s Democratic majorities. On Tuesday, his State of the State speech embraced the fondest hope of the progressive left — reversing a nearly century-old ban on an income tax — while avoiding any swerves to the right on budget reforms.

Ferguson’s support for the so-called “millionaires’ tax” on the state’s highest earners isn’t new, as he embraced the idea last month. It’s also probably more accurate to describe last year’s speech as the outlier rather than this year’s address. Ferguson the candidate courted the left assiduously, including the tax-the-rich crowd. As attorney general, he famously dismissed a lower-court ruling overturning the capital-gains tax as premature, waiting for the Supremes to overturn it.

And certainly it’s worth remembering how poorly his short-lived bluster against the Legislature taxing its way out of its largely self-inflicted budget problems actually played last year. Ferguson wound up signing one of the largest tax increases in state history, along with pretty much everything else lawmakers sent him.

As we noted when the governor attempted to pivot to the right last year, the Democratic majorities in the House and Senate were simply too large to engineer the kind of bipartisan budget compromise he was floating. November’s election did nothing to change that, and Ferguson looked like a man leaning into the inevitable, a would-be moderate maverick brought to heel.

Some specific takeaways from the speech:

Pushing back on Trump

Condemning violence perpetrated by ICE agents elsewhere in the country during the Trump administration’s immigration crackdowns, Ferguson endorsed a bill from Sen. Javier Valdez, D-Seattle, that would bar law enforcement officers from wearing face coverings in most circumstances. The mention drew the first standing ovation of the speech from Democrats, and Ferguson conveyed righteous anger at a “shameful period” in history. The bill, which has nearly two dozen cosponsors, is scheduled for a committee vote on Friday.

How to spend the income tax money

Ferguson called for a significant chunk of the roughly $3.5 billion that would be raised by the new tax to flow to tax relief. Along with beefing up the Working Families Tax Credit to send more money back to a larger number of lower-income Washingtonians, he called for zeroing out the business & occupation tax for small businesses with gross revenue of less than $1 million. For a business pulling in about $800,000 in gross revenue a year, that would wipe out about $4,000 in taxes, Ferguson said.

Independent poll shows traction for the income tax

As Danny Westneat noted in his column this week, a recent poll indicates a majority of Washingtonians would support an income tax on the highest earners.

This survey, which was from DHM Research’s regular poll of Washingtonians and not conducted for a client with skin in the game, found that 61% of respondents back the 9.9 percent tax on income over $1 million per year. Interestingly, 54% of self-identified Republicans were in favor. Support plummets, however, if the tax is expanded to cover income of more than $100,000 per year. Just 36% are on board for that.

That 61% number is intriguing because it’s borderline high enough to survive a ballot measure campaign to overturn such a tax. As a rough rule of thumb, you need to start with a 10-15% cushion to withstand a concerted campaign, although the newish requirement that initiatives carry a warning label about their impact on state spending may have made tax increases easier to protect.

However, the poor support for a broader tax supports the obvious message of a repeal campaign, which is that voters should not trust that the tax will stay at the $1 million or more level.