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Spokane, Washington  Est. May 19, 1883

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Jason Mercier: Prop 2: Slam the door on city establishing an income tax

Jason Mercier

This November, Spokane voters will consider Proposition 2, a charter amendment that would stop city officials from imposing a local income tax. Based on the actions of some lawmakers and judges, this is a protection voters might want to make sure they have.

Imposing a local income tax is against state law, but local officials in at least one city (Seattle) have already tried to impose one anyway in hopes of forcing a court ruling that would allow local income taxes across the state.

And it might be working. In July, the state Court of Appeals opened the door for local income taxes everywhere. That shocking decision is now expected to eventually be before the state Supreme Court.

Some state legislators are also pushing bills to let cities impose income taxes. These efforts are occurring even though statewide voters have rejected income tax ballot measures 10 times in a row. Further, in 2016 voters in Olympia also rejected a local income tax.

No matter what the courts or the Legislature do, though, if Spokane’s Proposition 2 passes, it will ensure that no local income tax could be imposed in the Lilac City.

Proposition 2 is sponsored by the citizens group Better Spokane. These concerned citizens say the measure is needed to help Spokane maintain its competitive advantage of no local income tax or business and occupation tax.

The people at Better Spokane are not alone in calling protection from an income tax a benefit to Spokane residents. For years the Washington Department of Commerce has made the state’s lack of an income tax a major selling point for its “Choose Washington” jobs promotion campaign.

According to Commerce Department officials: “We (Washington state) offer businesses some competitive advantages found in few other states. This includes no personal or corporate income tax.”

Washington State Treasurer Duane Davidson also agrees the lack of an income tax is an important advantage to the people of the state. At the Washington Policy Center’s May 2019 Solutions Summit held in Spokane, Treasurer Davidson made an impassioned speech on the need to avoid an income tax and explained why not having one is a positive policy for Washington.

An April 23 analysis issued by the city of Spokane Hearing Examiner found: “The proposed initiative is consistent with the state statute (prohibiting a local income tax). If anything, the measure incorporates the statutory prohibition of a local income tax into the Charter.”

A Yes vote on Proposition 2 would stop officials in the city of Spokane from imposing an income tax, regardless of future court rulings or any changes in state law. A No vote would give the Spokane City Council the green light to impose a local income tax.

Adoption of the measure would show that people want to safeguard the state’s second-largest city’s competitive advantage in having no income tax. Spokane voters can also send a clear message to lawmakers in Olympia – there is no appetite for an income tax in Washington state.

Jason Mercier is the Government Reform director for Washington Policy Center, a nonprofit, nonpartisan research organization with offices in Tri-Cities, Spokane, Seattle and Olympia. Online at