eye on business
This Isn’ t a Time for Lawmakers to Play Chicken With the Economy
Kris Johnson, AWB President
Our recent survey showing that 44 % of Washington business leaders are considering moving their personal residence to another state really touched a nerve.
It’ s easy to see why. It’ s a shocking number. Nearly half of the state’ s employers want to leave the state? Seriously? And the number that are considering moving their business elsewhere has doubled in the last year, from 9 % to 17 %? What’ s going on?
For beleaguered business owners who have been hit with billions in new taxes over the last few years, this wasn’ t really news, startling as it may seem. The frustration with Washington’ s tax and regulatory climate has been steadily building. Many small business owners who saw the news reports may have thought,“ yeah, that checks out.”
But for legislators who were busy trying to pass a bill to bring an income tax to Washington, it was an inconvenient distraction as reporters drew the connection between declining business sentiment and the push for yet another new tax.
In their public comments about the survey, some lawmakers acknowledged that Washington should take the threat of business relocation seriously as they consider tax policy. But some also questioned whether the threat is real, suggesting that businesses won’ t really leave and noting that many of the states that business owners might move to already have an income tax.
It’ s true, many of the states that Washington business leaders are reportedly eying for relocation( Arizona, Idaho and Montana) have an income tax. For employers, it’ s not simply a question of whether a state has an income tax or not— they are evaluating the overall business climate. Idaho has an income tax, but their tax system has been far more stable than Washington’ s. Their Legislature isn’ t proposing billions in new taxes literally every year like we’ ve experienced here in Washington.
Will businesses really leave? Some have already gone. With technology, it’ s easier than ever to live in one state and own a business in another state.
Others are putting plans in motion now that won’ t be completed for a few years. Keep in mind that moving to another state, whether it’ s a family or business, is a big decision that can take years to achieve.
And still others may never leave, but they’ re looking to grow in other states rather than here in Washington. This means
fewer new jobs in our communities, less capital investment and slower wage growth.
In the final days of the legislative session, lawmakers went forward with a new income tax anyway. They sent up a cloud of smoke into one of the few parts of the sky that remained clear in Washington’ s business environment.
During this election year, voters should think carefully about choosing lawmakers who will give stronger consideration to how their decisions will impact the state economy and whether their decisions will help or hurt small- and medium-sized business owners who are already feeling pessimistic.
Employers are wary of the tax debates that return every year to Olympia. They always seem focused on how to bring in more money for the state( even though state revenue has doubled in the last decade).
Yes, the bills being discussed this year included some tax relief proposals for families and small businesses, but those measures felt tacked on as something of an afterthought. The real sense of urgency is about how to bring in more money, not how to compete with some of these states that are looking increasingly attractive to Washington businesses.
Asking whether businesses will really leave is the wrong question. This isn’ t a time for lawmakers to play chicken with the economy.
A better question is, what can lawmakers do to grow the economy? What’ s their plan for supporting businesses, boosting competitiveness and strengthening the economy in every part of Washington? winter 2026 13