Property owners will pay higher taxes for public schools and manufacturers will pay less under Washington's two-year $43.7 billion state operating budget.
Governor Jay Inslee signed the budget into law with less than an hour to spare to avoid a partial government shutdown.
School Taxes Go Up
Washington has been in contempt of court since 2014 for not satisfying a state Supreme Court ruling that found school funding was inadequate. The new budget adds $1.8 billion for K-12 public schools, which is part of a multi-billion dollar hike over four years designed to satisfy the court order.
The statewide property tax per $1,000 of assessed value increases from $1.89 to $2.70, with the increase being earmarked for education. That rate is expected to bring in $6.6 billion over the next four years, with $1.6 billion coming in the next two years.
Lawmakers also capped local school levies at $1.50 per $1,000 valuation or $2,500 per pupil, whichever is less.
B&O Tax Rates Drop for Manufacturers
Under the new budget, Business and Occupation (B&O) tax rates for manufacturers will be reduced 40% over four years beginning in 2019.
The tax reduction won praise from officials with the Association of Washington Business who noted that Washington has been lagging behind in the manufacturing sector compared to the rest of the nation.
This tax break will reduce manufacturers' tax bills by an estimated $64 million over four years. The tax reduction could benefit more than 10,000 manufacturing companies, according to the Department of Revenue.