Washington’s income tax on millionaires would fund universal free school meals under new plan

OLYMPIA – The latest state income tax proposal on people earning more than $1 million a year has the backing of Gov. Bob Ferguson.

The deal, announced Friday, paves the way for Washington leaders to approve the state’s first income tax since the Great Depression.

The latest proposal includes expanded access to free school meals for students, said state Sen. Marcus Riccelli, D-Spokane.

It is estimated that the legislation, currently awaiting a vote in the House of Representatives, would generate about $3.5 billion a year once it takes effect in 2029. While Senate leadership has said 25 to 40% of the revenue would be used for tax breaks and other relief programs, the governor has pushed for more than half of the money to be returned to residents.

The income tax would be paid by individuals or couples who earn at least $1 million.

It was not immediately clear how much of the proposal announced Friday would pay to cut other kinds of taxes.

Following the announcement, Senate Republicans said they remained opposed to the legislation and argued that most of the revenue collected would be used to boost state spending rather than cutting taxes.

Ferguson has proposed a tax holiday on items that cost less than $1,000, a sales tax exemption on diapers and an expansion of the Working Families Tax Credit, among other ideas, as ways to return a portion of the revenue collected from the tax.

Ferguson said in a statement Friday that he would sign the latest version of the legislation into law, and said he was “especially pleased” that the free school meals was included in the plan.

“This version of the Millionaires’ Tax will make that happen. Senator Marcus Riccelli and Representative April Berg sponsored my Governor-request bill,” Ferguson said. “They have been champions on this issue, and I appreciate their partnership in our recent negotiations for this proposal.”

Riccelli said Friday there’s “still a long ways to go” before the idea is ultimately passed in legislation and signed by the governor.

“But to get it into the conversation, and potentially be included, I think, is a huge benefit to Washington kids and families, working-class families,” Riccelli said. “This will help everybody. Working-class families, kids that struggle with food, and it gets rid of that stigma.”

Shortly before taking office in January 2025 , Ferguson traveled to Whitman Elementary School in Spokane to push a plan to provide universal school meals to students. However, faced with a multibillion-dollar budget deficit, the legislation introduced by Riccelli stalled as lawmakers looked to fund other educational priorities. The bill did not include an estimate for how much the program would cost each year.

“This would be something that would be a shining light of what we can do when we make these moves to fix our tax code,” Riccelli said Friday.

The push to provide free school meals to every student began after the federal government instituted the policy during the COVID-19 pandemic. Riccelli, then a state representative, has pushed lawmakers to pass three bills to expand access to free lunches in the state. Currently, 70% of Washington students have access to the universal free lunch program, including all Spokane Public Schools students.

Riccelli thanked Ferguson on Friday for backing the idea.

“He gets it, and he’s been leading on it,” Riccelli said. “So credit is due to the governor for his efforts to lead on this, and I’ve been really pleased to work closely.”

Riccelli added that the idea to expand school meals is something that Ferguson is “interested in, he’s had a passion for, and that we’ve been working through, and I think that he has the foresight to understand that people want this and that it should be included in the package.”

Other tax relief proposals in the legislation include expanding the Working Families Tax Credit available to 460,000 additional households. The credit is a rebate for low-income families of $50 to $1,330 a year meant to reimburse them for sales taxes.

Last year about 350,000 families were eligible for the Working Families Tax Credit and 288,000 were granted the credit, which cost the state $208.2 million. The proposals calls for 5% of the money collected from the income tax to be used for the Fair Start For Kids Account, which is used for child care and early learning.

“I strongly encourage the Legislature to pass this bill with all of these investments in affordability included,” Ferguson said in a news release. “It represents a historic step forward in rebalancing our unfair system and making life more affordable for Washington families and small business owners.”

Senate Minority Leader John Braun, R-Centralia, said people should not be “fooled by Democrat rhetoric.”

“This income tax will expand in the future to include everyone. Democrats are leaving themselves that loophole, and the majority leader said they could amend it anytime they want to,” Braun said. “Similarly, Democrats have included a clause that prevents the public from overturning it through referendum.”

State Sen. Chris Gildon, R-Puyallup, the lead Republican budget writer, said in a statement that despite the changes, the bill remains “unconstitutional” and “unnecessary.”

“It seems Governor Ferguson was swayed by the major expansion of eligibility for the Working Families Tax Credit,” Gildon said. “I question whether gifting money back to a single filer with an income of $115,000, as the House rewrite would allow, is the sort of tax relief the people of our state need most.

Editor’s note: This story has been updated to reflect that Braun is the Minority Leader, not the Majority Leader.