As Washington State leaders head into the 2026 legislative session, new data from the September economic and revenue forecast and the Office of Financial Management’s Crosswinds Ahead Report reveal a challenging economic landscape. Slowing job growth, declining tax revenues, and rising costs are converging in our region, creating serious affordability concerns for employers and voters.

The state’s September forecast projects a $903 million drop in expected revenue collection through 2029, driven by weaker taxable sales, slowing job growth, and reduced real estate and construction activity. These trends are not new, and legislators passed a $9.4B revenue package this past session that included dozens of new business taxes, with the intention of staving off future revenue challenges. Yet, less than a year later, we again are  heading into another legislative session with a looming deficit in the billions for the next four years. Starting in 2019, state leaders have passed new business taxes almost every session, which has resulted in disproportionate impacts on small businesses, increasing cross-sector layoffs and closures, and rising consumer prices affecting working families. Will our leaders continue doing the same thing, expecting different results? Or bring solutions that will make a difference, not just for the state’s revenue and spending challenges, but for our economy?

Washington’s economy is also deeply tied to global trade, making it especially vulnerable to federal tariff policies. The Crosswinds Ahead report outlines the potential consequences of the proposed “Liberation Day” tariffs; whether it’s a family facing higher grocery bills or a small business absorbing supply chain shock, the theme is the same: affordability is under pressure. Employers are worried about retaining talent in a high-cost region. Voters are concerned about everyday expenses. And policymakers need to grapple with how to prioritize services without deepening the burden.

The Seattle Metro Chamber strongly opposes new or increased business taxes as a solution to the state’s revenue challenges. Washington’s tax structure already places a disproportionate burden on employers of all sizes  through the B&O tax and other mechanisms. Adding more business taxes will not solve our state’s affordability problem— it will worsen it.

Instead, the Seattle Metro Chamber urges lawmakers to:

  • Protect small businesses from new tax burdens and regulatory complexity.
  • Invest in workforce development to create pathways to good jobs.
  • Work with the business community to create a statewide economic development plan to grow jobs and attract new businesses to our region
  • Promote infrastructure and housing solutions that will reduce cost pressures.