Opponents file 511K signatures to repeal WA millionaire tax

OLYMPIA, Wash. - The battle over Washington's new income tax on high earners is one step closer to the November ballot. On Thursday, opponents of the legislation turned over signatures for an initiative to repeal it.

The political committee Let's Go Washington has been collecting signatures for I-645 since mid-May, with a threshold of about 309,000 signatures required for the November ballot. The final tally soared past that requirement, as Let's Go Washington revealed a total of 511,408 signatures. That's the fourth-highest number of signatures ever gathered for an initiative in Washington.

Supporters of I-645 gathered at the Secretary of State's division office in Tumwater to hand over the signatures. Let's Go Washington founder Brian Heywood was joined by a coalition of small business owners, farmers, families, entrepreneurs, retirees and other supporters for the event.

"This is not what we want for the future of the state of Washington. We know this is going to drive down the economy," said Greg Lane, Executive Vice President of the Building Industry Association of Washington.

The signatures must now be verified by the Secretary of State. Heywood is confident that hurdle will be cleared, telling FOX 13, "It'll be on the ballot no matter what. We check the validity, we run it against voter registration. We've been doing it enough that now our system, we can look at it with pretty strong confidence."

Indeed, Heywood is no stranger to the initiative process, with his group boasting four previous initiatives passed into state law.

The backstory:

This current ballot push is focused on Senate Bill 6346, the so-called "millionaires tax," signed by Governor Bob Ferguson back in March. The legislation places a 9.9% tax on household income over $1 million. It's set to take effect in 2028, with collections beginning in 2029. The income tax is expected to generate around $3 billion annually.

Governor Ferguson and democratic lawmakers have pledged a significant portion of that revenue will go back to Washington families and small business owners. The bill provides expanded eligibility for the Working Families Tax Credit, tax cuts for small businesses, and the elimination of sales tax on diapers, over-the-counter drugs, and hygiene products.

If I-645 passes, the state would still be on the hook to pay for those perks. The initiative doesn't fully repeal the law, instead preserving certain parts of it. "Any tax cut, we kept," Heywood said.

Heywood is also an opponent of Washington's capital gains tax, passed in 2021, but he's tamping down speculation that I-645 poses a threat to this other source of revenue.  The Pacific Law Group issued a memo in June, stating I-645 would likely repeal Washington's capital gains tax.

"That's complete malarkey," Heywood told FOX 13. "It's not doing that.  It wasn't designed to do that. This is not a sneaky backdoor tactic or anything. It's straightforward. We define income and we stop the income tax and the capital gains excise flim-flammery, we don't touch."

Much like the capital gains tax, Heywood argues the millionaires tax will drive away businesses and jobs.

"Our economy will be less attractive and people will move and businesses will shut down and investment will stall," Heywood said. "This is ill-thought-out, it's dangerous, and it really is going to punish all the small businesses that have busted their hump and sacrificed vacations and all of that. That's who this hits."

The other side:

While Let's Go Washington leads this charge against the millionaire's tax, other groups are now rushing to its defense.

That includes Invest in Washington Now, rebutting Heywood's signature turn-in event with a statement from Washington Education Association President Larry Delaney that reads, in part, "I-645 would take money from our schools and send housing and healthcare costs skyrocketing. But that’s not all. It would take away funding from child care, raise taxes on small business and working families, and eliminate universal school lunches. Can you imagine being so greedy that you want more kids to go hungry so that you can have $11 million a year instead of $10 million a year? That’s exactly what initiative 645 would do."

Invest in Washington Now points to recent polling from GBAO that shows I-645 is likely to fail by a margin of 57% opposed and 38% in support. Heywood contends, the polls are often posed as a loaded question.

"If you go out and you say, hey, this is going to take money from baby seals and kittens and K through 12, we lose." When asked if he's confident voters will approve I-645, Heywood told FOX 13, "It's a battle now."

What's next:

That battle will play out in the coming months through public messaging campaigns, urging Washingtonians to vote "Yes" or "No" on I-645. A "Yes" vote would repeal the income tax. A "No" vote would leave the income tax in place.

While voters will likely cast their vote on this issue in November, they may not have the final say. If voters uphold SB 6346, it faces another potential repeal in court. The government watchdog group Citizen Action Defense Fund filed a lawsuit in April, challenging the income tax on constitutional grounds. That lawsuit is widely expected to land before the State Supreme Court.

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