Tri-Cities should join the I-82 local income tax ban highway

Communities along Interstate 82 are fast becoming Washington’s local income tax ban highway. The local bans are in response to an ongoing effort by some to ignore the consistent message from voters and try to impose an income tax.

This month the Yakima City Council placed a charter amendment to ban a local income tax on the November 2021 ballot for voters to consider. A similar proposal was adopted by 72% of Spokane voters in 2019. Shortly after Yakima acted, the Union Gap City Council unanimously adopted a local income tax ban. Granger has also enacted a local income tax. Though not on I-82, last month the Battle Ground City Council unanimously adopted a resolution to ban a local income tax and Spokane Valley did the same in 2019.

Testifying in favor of the Yakima income tax ban, Greater Yakima Chamber of Commerce CEO/President Verlynn Best said, “It allows us to have a competitive edge in the future of development and business. If we fail placing this in our charter to serve our citizens, it’s safe to say this council will be telling our community it is open to a local income tax in the future.”

Discussing why she proposed the income tax ban charter amendment, Yakima Mayor Patricia Byers said, “Our businesses are trying to rebuild in the community. To even say that we’re open to having an income tax would be a deterrent to other businesses looking to come into the community.”

After the successful council vote to forward the charter amendment to this year’s ballot, Mayor Byers told me, “Washington State voters have made it very clear over the years that they oppose any type of an income tax. And it has given us a competitive edge in attracting businesses statewide.”

In fact, the lack of an income tax has long been advertised by the State Department of Commerce as being a “competitive advantage” for Washington. State voters have also made it consistently clear they don’t want an income tax.

While some say that local income tax bans are a “red herring” and “waste of time,” they are actually a popular effort to stop the anti-competitive income tax kraken from rising out of the sea. I really wish there wasn’t a concerted political effort to impose an income tax on Washington state and its cities. Unfortunately, that’s not the case.

The cities acting to ban a local income tax are directly responding to the ongoing effort by some to use the courts to impose an income tax. In response to Seattle’s efforts to impose an income tax in 2017, the Court of Appeals in 2019 struck down (on a technical single subject violation) the 1984 state law that explicitly prohibited local income taxes. When the state Supreme Court let that ruling stand last year it opened the door for every local government in our state to impose a flat 1% income tax.

Earlier this year the legislature also adopted an unconstitutional capital gains income tax (while refusing to stop cities from imposing a local version) with the stated goal of using the courts to open the door to graduated income taxes across the state. The legislature has also funded budget studies to convince Washingtonians to support an income tax, with a taxpayer-funded commission now traveling the state to do the same.

As this capital gains income tax legal process continues, expect more cities to make it clear to their businesses and citizens that there is no interest to impose a local income tax. The threat is now clear. Every city, every county, every school district could impose its own flat income tax, unless local officials act forcefully to slam that door shut.

Now is the time for the Tri-Cities to do just that and proudly join the I-82 local income tax ban highway.

This story was originally published August 23, 2021 at 12:55 PM.