Based on initial returns, 78% of Yakima voters are approving Prop 3 to add a local income tax ban to the city charter. This means 11 cities and one county in Washington have now acted to ban a local income tax. The movement to ban local incomes taxes comes as state lawmakers this year enacted Washington’s first statewide income tax, on capital gains income, a bill whose constitutionality is being challenged in the courts. Speaking of the capital gains income tax, 61% of statewide voters are recommending the legislature repeal that new tax based on the initial results for Advisory Vote 37.

As for Yakima Prop 3, testifying in favor of the Yakima income tax ban before the city council in August, 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.”

The Greater Yakima Chamber of Commerce and Mayor Byers are not alone in calling the absence of an income tax a competitive advantage and a benefit to Yakima residents. 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.”

Along with action by city councils, voters in three Washington cities have now voted to reject a local income tax since 2016:

• 2016 – Olympia Initiative 1 (impose city income tax): No – 52%
   
• 2019 – Spokane Prop 2 (city income tax ban charter amendment): Yes – 72%
   
• 2021 – Yakima Prop 3 (city income tax ban charter amendment): Yes – 78% (initial returns)

Statewide voter rejection of the new capital gains income tax via Advisory Vote 37 is not a surprise either. Since 1934, Washington voters have now rejected 11 straight income tax proposals (6 constitutional amendments, 4 initiatives and 1 advisory vote).

Here are the statewide income tax votes since 1934:

• 1934 – 57% no on House Joint Resolution 11
   
• 1936 – 78% no on Senate Joint Resolution 7
   
• 1938 – 67% no on Senate Joint Resolution 5
   
• 1942 – 66% no on proposed constitutional amendment
   
• 1944 – 70% no vote on I-158
   
• 1970 – 68% no on House Joint Resolution 42
   
• 1973 – 77% no on House Joint Resolution 37
   
• 1975 – 67% no on I-314
   
• 1982 – 66% no on I-435
   
• 2010 – 64% no on I-1098
   
• 2021 – 61% repeal on Advisory Vote 37 capital gains income tax 

Perhaps this is why the majority party worked so hard to deny citizens their right of referendum this year with a fake emergency clause on the capital gains income tax. Democratic Sen. Mark Mullet in a floor speech called out his party for the back-door emergency clause used to deny Washingtonians their right of referendum on the capital gains income tax. Sen. Mullet said:

“I find it extremely disappointing that we’ve now moved heaven and earth to make sure the residents of Washington state are not able to challenge this bill thru the referendum process.” (Comments at 52:47 min mark of floor debate)

In calling for a repeal vote, the Seattle Times editorial board wrote:

“A judge will decide whether the Washington Legislature’s hastily enacted capital-gains tax violates the state constitution, but voters should signal their displeasure by encouraging lawmakers to repeal Advisory Vote No. 37.

Elected Democrats took advantage of one-party rule last spring to shoehorn this massive change into state tax code even as a bipartisan Tax Structure Work Group was studying comprehensive tax reform . . .

Advisory votes don’t repeal the law, but they do reveal public opinion about revenue-increasing legislation. They are an artifact of a voter initiative requiring any legislative tax or fee increases to appear on the ballot.

The least state lawmakers deserve for their premature maneuver is a collective thumbs down from the people they’re supposed to represent.”

The Tax Foundation wrote this concerning Advisory Vote 37:

“Legal challenges to the tax are already pending and may ultimately do more to stop it in its tracks than can a nonbinding advisory vote. Nevertheless, the fate of Advisory Question 37 is an important one, not only because the capital gains tax itself would be economically harmful, or because it shows an irreverence for the state constitution, a concern in its own right. It’s also important because if voters signal their opposition to taxing this specific class of income, that sends a strong message that they are decidedly uninterested in efforts to scrap the state’s ban on a broader income tax.”

61% of statewide voters have now sent that clear message.

11 straight statewide votes and 3 local elections have made it clear there is no interest in throwing away Washington’s competitive advantage of no income taxes. Can lawmakers in Olympia finally hear us?

Additional Information
Citizens’ Guide to Proposition 3, to prohibit imposition of an income tax in the City of Yakima
Tax Foundation/Seattle Times highlight capital gains income tax advisory vote
Editorials continue to blast new capital gains income tax