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Some of Washington’s largest corporations are warning Democrats in Olympia to drop the wealth and payroll taxes, warning it will harm the state’s economy.

“Washington state cannot sustain continued tax and spending increases and simultaneously maintain our economic resilience and competitiveness,” the letter stated.

Dozens of large businesses urged Governor Bob Ferguson and Democratic and Republican leadership to “review and revise” the budget proposals to drop the controversial taxes. The signatories include Amazon, Microsoft, Seattle Mariners, Alaska Airlines, Costco, and Puget Sound Energy.

“These proposals would result in the largest tax increases in state history, perpetuating a dangerous trend of unsustainable spending growth,” the companies wrote in the letter obtained by MyNorthwest. “Over the past decade, the state operating budget has more than doubled, with a 37 percent increase in just the last four years. This growth far exceeds state increases in population, inflation, and personal income, threatening our economic stability.”

Big businesses praised Ferguson, says tax hikes aren’t needed

The letter was sent after Governor Bob Ferguson rejected two Democratic budgets that included a wealth tax this week because he said it wasn’t prudent to base spending on a novel and legally untested tax. But he did not take a position on the payroll tax, and left the door open to a small wealth tax as a test case for the courts.

“Yesterday, we were encouraged by the Governor’s announcement that he would not sign the proposed wealth tax. We support the five priorities he outlined as fiscally responsible in these unprecedented times such as preserving the state’s Rainy Day Fund, and we agree with the Governor that we cannot just ‘tax our way out of here,'” the letter stated.

The big businesses explained that new tax hikes aren’t necessary, either.

“Even with no new taxes, existing revenue sources are projected to rise by a healthy 6.8 percent in the 2025-2027 biennium and 7.7 percent on top of this in the 2027-2029 biennium. Given this, we believe it is a mistake to enact, as proposed last week, billions of dollars of additional tax increases with the apparent goal of growing tax revenue by almost 15 percent in the next two years alone,” the letter explained.

“I appreciate the governor providing more clarity today on his vision for the operating budget and his commitment to a balanced approach — one that includes both new revenue and responsible, targeted reductions,” Democrat June Robinson, the lead senate budget writer, said in an email to ³ÉÈËXÕ¾ Newsradio. “This aligns with the thoughtful, forward-looking mindset that’s guided our process from the start. I’m confident we will continue working together to deliver a final budget that meets the needs of Washingtonians and puts our state on strong financial footing for the future.”

Will payroll taxes push jobs out of state?

The coalitions of businesses warned that additional taxes, like the payroll tax, will push jobs out of the state.

“We want to maintain and grow jobs here in Washington and ensure our companies thrive in its diverse communities. However, in a global economy, capital and jobs are mobile, migrating from market to market. For example, it is 30 percent less expensive to employ a software engineer in Vancouver, BC than in the Puget Sound,” the letter said.

The letter referenced failures of the Seattle payroll tax. Seattle Mayor Bruce Harrell acknowledged that the payroll tax projections were short by $47 million because businesses impacted by the tax moved jobs out of the city.

Getting vocal in opposition

The business community has been more vocal about their concerns over risings costs of doing business in Washington state. With some exceptions, local business leaders have mostly shied away from engaging in public debates over policies, even donating to Democratic causes like the Climate Commitment Act. But this legislative session, they’ve taken a markedly different approach.

Microsoft president Brad Smith sat down with KING 5 and expressed his concerns over taxes.

“There are proposals in Olympia that, frankly, would take our economy backwards and put jobs at risk,” Smith explained. “And taxing jobs in the form of a payroll tax. Payroll tax makes it more expensive to create jobs here. A so-called ‘wealth tax’ would really, I think, discourage people from starting up companies in Washington state.”

Other companies signed on to the letter include Cherry Point Refinery, Washington Trust Bank, PACCAR, Weyerhaeuser, Vulcan Real Estate, Zillow, T-Mobile, and Redfin.