A rare split among Democrats emerges as the Washington House approved a 9.9 percent tax on income above $1 million while Rep. Alicia Rule voted no. (Alicia Rule Facebook)
OLYMPIA, Wash. — Democrats and local education leaders in Northwest Washington are raising concerns after the Washington Legislature approved a proposal that critics say effectively creates a Washington state income tax.
Lawmakers approved the measure last week creating a 9.9 percent tax on annual income above $1 million. Supporters say the proposal targets the wealthiest taxpayers and could generate billions for education and other state programs. Critics argue the measure violates Washington’s constitution and could face years of legal challenges.
One of the most notable votes against the proposal came from a Democrat representing Whatcom County.
Alicia Rule Breaks With Democrats
State Rep. Alicia Rule, who represents the 42nd Legislative District, voted no on the so called “millionaires tax.”
Rule said Washington’s tax system needs reform but argued the proposal lacked transparency and failed to guarantee stable funding for education.
“Like many people in Washington, I believe our tax system needs reform.” she said. “It relies too heavily on sales taxes and property taxes, which fall hardest on working families. If we are going to make changes, they should be thoughtful, transparent, and durable. Unfortunately, the millionaires tax proposal failed that test.”
Rule said she pushed lawmakers to dedicate 40 percent of the revenue to the Education Legacy Trust Account to support schools across the state.
Those investments could have supported priorities such as stable K–12 funding, Transition to Kindergarten programs, Running Start college credit programs, student mental health services, math and reading specialists, and levy equalization funding for smaller districts.
Rule said lawmakers declined to make those commitments.
Instead, she said the proposal creates a new tax without clear guarantees about how the money will be spent.
Rule also pointed to what she described as a troubling contradiction during the budget debate.
“The very next day after the millionaires tax passed, legislators were asked to vote to cut $56 million from education funding,” Rule said. “This came at a time when some schools in our district cannot even afford basic supplies — schools where teachers are stretching budgets and rationing paper. That contradiction is difficult to ignore. If we are serious about education, the first step should be protecting the funding our schools already depend on.”
She also warned the measure is likely to face legal challenges because Washington courts have historically ruled that graduated income taxes violate the state constitution.
Where Local Legislators Stood
In the 42nd Legislative District, which covers much of Whatcom County:
- Rep. Alicia Rule (D) – voted NO
- Rep. Joe Timmons (D) – voted NO
- Sen. Sharon Shewmake (D) – voted YES
Nearby districts showed similar partisan divides.
In the 40th Legislative District, which includes parts of Skagit and Whatcom counties:
- Rep. Alex Ramel (D) – voted YES
- Rep. Debra Lekanoff (D) – voted YES
- Sen. Liz Lovelett (D) – voted YES
Republican legislators across northwest Washington opposed the proposal. The dissenting Democrats were: Dan Bronoske, Melanie Morgan, Adison Richards, Kristine Reeves, Clyde Shavers, Joe Timmons, Alicia Rule, and Amy Walen.
Ferndale Schools Leadership Raise Funding Concerns
Ferndale School District Superintendent Kristi Dominguez said she is watching closely how the state plans to use revenue from the tax.
Dominguez said many public statements about the proposal have focused on funding free school meals.
“Each time that I see the Governor speak about the Millionaires’ Tax and how it will support K–12 education, the only example that continues to be highlighted is free breakfast and lunch,” Dominguez said.
Dominguez acknowledged the importance of meal programs and said she personally relied on school lunches as a child.
At the same time, she said many districts already provide universal meals through federal programs, including Ferndale.
Because of that, she said the proposal may not address the areas where schools are experiencing reductions.
Dominguez said roughly $90 million was reduced from K–12 investments designed to help level the playing field for students.
Programs such as Learning Assistance and Transition to Kindergarten help support districts serving higher poverty communities.
“Focusing any new K–12 investment from this tax on meals will not restore those cuts,” Dominguez said.
She warned the approach could widen disparities between districts rather than close them.
“The divide will only grow if this is where we focus our thinking,” she said.
Dominguez said she hopes any new revenue helps the state meet its constitutional obligation to fund education.
“Washington’s Constitution is clear that it is the state’s paramount duty to amply fund the education of all children,” she said.
Business Leaders Warn About Economic Impact
The tax proposal has also drawn concern from business leaders.
Seattle Seahawks general manager John Schneider said the tax could affect the team’s ability to recruit players.
“It’s gonna sting,” Schneider said, adding the tax could “come into play” when negotiating contracts.
Washington has historically had no state income tax, which some employers cite as an advantage when recruiting workers and businesses.
Schultz Announces Move From Seattle
On the same day lawmakers approved the proposal, former Starbucks CEO Howard Schultz announced he and his wife Sheri are relocating from Seattle to Miami.
Schultz shared the announcement in a LinkedIn post reflecting on his decades living in Seattle and building Starbucks into a global brand.
The move came as Washington lawmakers finalized approval of the tax proposal.
Timeline: How The Income Tax Bill Moved Through Olympia
Jan. 2026
Democratic lawmakers introduce the so-called “millionaires tax” proposal during the 2026 legislative session. The measure creates a 9.9 percent tax on annual income above $1 million.
February 2026
The bill moves through Senate policy and fiscal committees where lawmakers debate the legality of a graduated income tax under Washington’s constitution.
Feb. 2026
The Washington Senate passes the bill and sends it to the House for consideration.
Late February to early March 2026
The House Finance Committee holds hearings and advances the bill to the House floor.
March 10, 2026
After a lengthy floor debate, the Washington House passes the bill. Rep. Alicia Rule votes no, breaking with many Democrats in her caucus.
March 11, 2026
The Senate votes to concur with the House changes, approving the final version of the legislation.
Mid-March 2026
The final bill is transmitted to the governor’s desk.
Expected next step
If signed into law, the tax is widely expected to face immediate legal challenges and could also become the subject of a statewide ballot initiative.
Washington Senate Republicans Criticize Budget And Tax Increases
Washington Senate Republicans also criticized the broader tax and budget policies approved by Democratic lawmakers in recent sessions.
In a statement, the caucus said Democrats passed what they described as the largest tax increase in state history pointing to SB 5167 and accused lawmakers of limiting public input during the budget process.
The caucus also called out HB 2049, which they said includes major property tax increases that could lead to higher rents, and SB 5814, which expands the state sales tax to additional services used by nonprofits, charities, health care providers, childcare programs and school districts.
Republicans also criticized state fuel policies as gas prices climbed above $5 per gallon in parts of Washington.
Washington’s state gasoline tax rose to about 55.4 cents per gallon on July 1, 2025, one of the highest state fuel taxes in the country. Republicans also point to the Climate Commitment Act passed in 2021 under SB 5126, which requires fuel suppliers to purchase carbon allowances through the state’s cap and invest system.
The caucus argues those policies increase fuel costs that are passed on to drivers.
The statement also accused lawmakers of cutting funding from programs including Medicaid, childcare and domestic violence prevention while increasing several state fees.
Those increases include the 50% increase to Discover Pass and 38% hunting and fishing licenses, which lawmakers approved earlier this session.
All while quietly defunding one of the most iconic fisheries in North America: the spring Skagit River steelhead season.
Democratic leaders have argued the tax measures and climate policies are necessary to address Washington’s budget shortfall and fund education and environmental programs.
Affordability Debate Continues Across Washington
The debate over the income tax proposal is unfolding during a broader conversation about affordability in Washington.
Residents across the state are facing rising costs tied to housing, fuel and everyday goods. Gas prices have climbed above $5 per gallon in some areas, while lawmakers have also approved increases to fees such as the Discover Pass along with higher hunting and fishing license costs this year.
At the same time, lawmakers are debating how to address education funding, health care spending and long term state budget obligations.
With legal challenges expected and the possibility of a future ballot initiative, the fight over the proposed state income tax is likely to remain a major political issue in Washington well beyond this legislative session.
“Washington should absolutely have a serious conversation about tax reform,” Rule said. “But reform should be comprehensive, legally sound, and transparent. It should include clear commitments to education and real relief for everyday taxpayers — not just promises about future spending. Until we are willing to do that work, I cannot support policies that create more uncertainty than solutions.”
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