Add Kennewick to growing list of cities that have banned local income tax

Sep 7, 2021

The Kennewick City Council this evening voted to ban a local income tax. Kennewick is now the sixth Washington city to go on record opposing a local income tax joining Battle GroundGrangerSpokane, Spokane Valley and Union Gap. Yakima voters will also be considering an income tax ban charter amendment this November.

From the newly adopted Kennewick income tax ban resolution (page 188 of council packet):

“The City Council hereby declares that a local income tax would be in direct conflict with the high value the City places on promoting economic development through the attraction and expansion of financially healthy, family-wage paying employers. Small businesses are the backbone of our local, regional, state, and national economy and it is imperative that the City not put unnecessary hurdles in the way of their success. As such, the Kennewick City Council prohibits the imposition of a local income tax in the event a local income tax is determined legal and permissible by the Washington State Supreme Court or the Washington State Legislature.”

Here was my testimony encouraging the Kennewick City Council to adopt the local income tax ban resolution (starts at 15:31). 

For years, the Washington Department of Commerce has made the state’s no-income-tax policy a major selling point for its “Choose Washington” jobs promotion campaign. According to Commerce Department officials:

“We offer businesses some competitive advantages found in few other states. This includes no personal or corporate income tax.”

Former Washington State Treasurer Duane Davidson also agrees that having no income tax is an important advantage to the people of the state. At Washington Policy Center’s May 2019 Solutions Summit held in Spokane, Treasurer Davidson described the importance of avoiding an income tax and explained why not having one is a positive policy for Washington. 

State voters have also made it consistently clear they don’t want an income tax by rejecting 10 straight ballot measures (including six proposed constitutional amendments).

Kennewick and the other cities acting to ban a local income tax are directly responding to the ongoing effort by some to use the courts to bring Washington an income tax. In response to Seattle’s efforts to impose an income tax, the Court of Appeals 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 it opened the door for every local government to impose a flat 1% income tax.

Earlier this year the legislature also adopted an unconstitutional capital gains income tax (while refusing to pre-empt cities from imposing a local version) with the stated goal from supporters of using the courts to open the door to 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.

Now that Kennewick has acted, will Pasco and Richland be next and complete the Tri-Cities circuit by making it clear to citizens and businesses that they too will protect their economic competitive advantage by prohibiting the imposition of a local income tax?

UPDATED (7:45 p.m.)

Make that seven cities with a local income tax ban. The Moses Lake City Council adopted this on August 24 (page 85 of council packet): 

"The City Council hereby declares its position that the imposition of a local income tax on the residents of the City of Moses Lake is prohibited and asks the Governor and our State Representatives to consider the will of the people. As such, the Moses Lake City Council will prohibit the imposition of a local income tax in the event a local income tax is determined legal and permissible by the Washington State Supreme Court or the Washington State Legislature."