Home  |  About Peter  |  News & Media  |  Email Updates  |  The Ledger  |  Contact

May 27, 2025

Dear Neighbor,

The 2025 legislative session has concluded, and its legacy is clear: the largest tax increase in Washington state history. Over the next four years, Washingtonians will shoulder an additional $12.2 billion in new taxes and fees.

At a time when families are grappling with inflation, housing costs, and rising fuel prices, the Legislature should have prioritized fiscal responsibility and affordability. Instead, the majority party advanced state spending, coupled with a sweeping expansion of taxes that disproportionately affect working families, small businesses, and rural communities.

Despite calls for balance from Republicans and earlier statements from the governor advocating budget restraint, Democrats in the House, Senate, and ultimately the governor, voted to grow government by $6 billion, expand programs with limited oversight, and raised costs on virtually everything—from groceries and health care to electricity, gas, housing, and even outdoor recreation. The final plan intensified policies that make living, working, and raising a family in Washington more challenging.

The affordability crisis deepens

Washington’s affordability crisis is not just a statistic—it’s a daily reality for countless residents.

Housing costs: Home prices in Washington have surged over 800% from 1984 to 2024, vastly outpacing the national average of nearly 500%. This steep rise has made housing affordability a significant concern, especially when the state’s overall inflation rose only 203% and median household incomes increased by 233% in the same period. Shockingly, about 73% of Washington households cannot afford a median-priced home of $640,000, and in Seattle, the median home price is approximately $875,000.
Source: Axios

Rental market: In the Seattle metropolitan area, individuals need to earn approximately $91,000 annually to afford the typical rent of $2,271 per month, under the standard affordability guideline that rent should not exceed 30% of household income. This marks a 23% increase from five years ago, reflecting how housing costs have risen significantly faster than wages.
Source: Axios

Transportation expenses: Washington state residents are facing a 17% increase in car insurance rates in 2025 compared to 2024. And the pain doesn’t stop there. Washington drivers are already paying among the highest fuel prices in the nation, with average gas prices hovering more than $1 per gallon above the national average. This is mainly due to Washington’s 49.4-cent gas tax and climate-related surcharges.
Source: House Republicans of Washington / AAA

Cost of living: Washington State has fallen to the 10th position in U.S. News and World Report’s 2025 Best States rankings, down from 8th in 2024 and from the top spot it held in prior years, such as 2019 and 2021. The state received strong ratings for its natural environment and infrastructure, ranking 7th nationwide. However, it performed poorly in affordability, ranking 46th in cost of living.
Source: Axios

Tax increases that hit where it hurts

The majority party’s approach this session was clear: more taxes, fees, and financial pressure on everyday Washingtonians. Instead of adjusting the state’s bloated spending or offering meaningful relief during an affordability crisis, they doubled down, pushing through tax hikes that touch nearly every aspect of life.

A $12.2 billion tax increase over four years, equivalent to about $2,000 per year for a family of four

New or higher taxes on:

• Property (HB 2049), capital gains (SB 5813), and estates.
• Business and occupation (B&O) categories—hitting small and mid-sized businesses the hardest. | HB 2081 | You can read my recent op-ed here: Washington’s 2025 Legislature missed the mark for small businesses
• Nicotine products, even those used for smoking cessation | HB 2068

Dozens of new fees, including:

• Liquor licenses | SB 5786
• Hunting and fishing permits | SB 5583 and HB 2003
• Discover Passes (up 50%) | SB 5390
• Park concession fees | HB 2061
• Professional licensing, marriage licenses, and more.

Perhaps the most egregious example of tone-deaf policymaking came with SB 5801, which imposes $3.2 billion in new taxes and fees over six years, under the guise of fixing our transportation system. The bill raises costs for Washington drivers and families in dozens of ways:

• 6-cent per gallon gas tax increase (on top of an already 49.4-cent state gas tax and climate-related fees)
• 12-cent diesel tax hike, phased in overtime, raising freight and delivery costs for everything from groceries to farm equipment
• 400% increase in the replacement tire fee (from $1 to $5 per tire)
• Vehicle registration and licensing fees increased across the board
• Rental car taxes nearly doubled (from 5.9% to 11.9%) in 2026
• Luxury vehicle taxes, airplane and watercraft sales tax increases, even a $1 surcharge on large venue event tickets

And these are just the taxes. Much of this money will not go to fix failing roads or reduce commute times but instead fund ideological mandates, transit experiments, and urban-focused infrastructure, leaving rural communities, farm-to-market roads, and freight corridors underfunded.

Diverting driver dollars to the General Fund: Perhaps most concerning, the transportation budget is being used to bail out the operating budget. Starting July 2025, $448 million in revenue from drivers will be diverted to fund unrelated government programs, turning the gas pump into a cash register for bureaucracy.

A regressive strategy: These tax increases hit low- and middle-income households the hardest. Whether it’s trying to drive to work, afford child care, or take a weekend fishing trip with the family, the message from Olympia is clear: if you’re an average Washingtonian trying to make ends meet, you’re expected to pay more and get less.

Delivering results: Legislation signed into law

Despite these challenges, I am proud to report that several bipartisan bills I sponsored have been signed into law, aiming to provide tangible benefits to our communities:

• HB 1990 – Utility resilience after disasters: This legislation enables utilities to recover more swiftly and affordably after disasters like wildfires and floods, without imposing excessive costs on ratepayers. You can read my press release here.
• HB 1064 – Infrastructure coordination (SYNC Team): Extends the state’s multi-agency team focused on streamlining infrastructure projects, ensuring efficient use of taxpayer dollars, particularly in rural and underserved areas.
• HB 1039 – Strengthening city-tribal partnerships: Facilitates cooperative agreements between cities and tribes, such as La Center and the Cowlitz Tribe, to deliver essential services and support smart growth. You can read my press release here.

What comes next — and why your voice matters

While the 2025 session brought a wave of tax increases, the truth is, Democrats are just getting started. There are dozens of additional tax proposals still on the table—some already pre-filed for next year. From income-based taxes to more fees on essential services, they’ve made it clear that their solution to every budget issue is to reach deeper into your pockets.

That’s why your engagement matters now more than ever.

The only way to stop these harmful proposals is by staying involved, raising your voice, and holding lawmakers accountable. Olympia works best when it hears directly from the people it serves—not just during session, but year-round.

I’ll continue fighting for common-sense policies that protect working families, respect your hard-earned money, and invest in solutions that strengthen—not strain—our communities. But I can’t do it alone.

If you’d like a full breakdown of the tax proposals passed this session, and the ones still looming, visit: How Democrats Will Tax You

Thank you for the continued honor of serving you.

Sincerely,

Peter Abbarno