Thoughts on the portability of wealth

Plus a proposed cut in teacher bonuses, Inslee's housing wishlist, and a new boss at DCYF

We didn’t have one of the 3,400 financial whales who stand to get harpooned by outgoing Gov. Jay Inslee's proposed wealth tax handy. So we just went ahead and made one up.

Meet Jane Venture. Jane made her first pile of money as an early-stage Amazonian back at the turn of the millennium. Then she parlayed that cash into a 20-year run as a serial startup entrepreneur, launching and then selling a series of companies. Now in her mid-50s and kinda-retired, she’s worth a cool $200 million thanks to a combination of smarts, hard work, ruthlessness, and extreme good fortune.

Should the Legislature adopt the wealth tax Inslee proposed this week, she’d have to cough up 1% of the second $100M, or $1M, every year. If you figure she makes it to 85, that’s 30 million bucks.

Photo by Chris Leipelt on Unsplash

Let’s be clear, Jane can afford this. Conservatively invested, that $200M kicks off about $10M a year before taxes.¹ Aside from the property tax bite on her sweet piece of Mercer Island waterfront, Washington State currently gets zero of those dollars until (and unless) she spends it on houses, cars, boats, or other things subject to the sales tax or other excise taxes.²

Here’s the thing: Jane is private-jet rich. Villa-in-Tuscany rich. There’s a palatial house in Sedona and a swanky condo in Park City, where they keep the good powder.³ There’s a 45-foot catamaran moored on the Dalmatian coast. She can and does live wherever the hell she pleases. Her nominal residency in this Washington might be because it’s such a favorable place to park a large pile of money.

So is Jane going to hold still for this shearing? She’s got options. Texas and Florida offer far safer harbors for wealth. The guy who used to be the biggest whale in this scenario, Amazon founder Jeff Bezos, decamped for Florida some time ago. Even if the thought of living in either of those states makes Jane wrinkle her nose and say “Ew,” the size of that wealth tax would suddenly make other places, places that she already loves, look attractive.

Back to the palatial house in Sedona, where Jane is kicking it as we write this. (It’s going to be 69 and sunny today.) The 1% bite on her wealth is equal to a 10% income tax on that $10M a year. Arizona’s state income tax is 2.5%. That would be $22.5M in savings over 30 years, not counting any income on the capital she’d get to keep. Changing her official residence would be so easy that her accountant and lawyer would farm it off on interns.

So let’s set aside the question of whether the state actually needs Jane’s $1M per year and analogous amounts from her wealthy peers to help cover its budget problems. Would it even work?

And here’s an extra little nugget we got from the Office of Financial Management: Most of the taxable wealth in this scenario is held by the folks at the very top of the ladder. The top 10% of that 3,400 folks have 63% of the cash in question. So a relative handful of people peacing out for other jurisdictions would move the needle.

PQ

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Inslee’s school budget proposal ruffles feathers at OSPI and WEA

Gov. Jay Inslee’s budget proposal drops the share of state dollars for K-12 education to a six-year low, representing 42% of the spending in the overall budget, the Office of Superintendent of Public Instruction said. That’s a roughly 1% drop from the 2024 operating budget. Superintendent Chris Reykdal had asked for a $3 billion bump in school spending.

Meanwhile, the biggest cut to K-12 education proposed by Inslee’s budget team would hit the paychecks of the influential Washington Education Association’s most qualified teachers.

Lawmakers approved annual bonuses of $6,200-6,300 for National Board-certified teachers in the last biennium. Since 2007, the state has offered an additional $5K for certified teachers working in high-poverty schools.

Inslee’s budget recommends a four-year freeze on the bonuses for teachers who complete the rigorous professional development program for mid-level instructors. The pause would save the state about $151 million in the 2025-27 budget.

Fighting the proposed bonus cuts quickly rose to the top of the WEA’s agenda for the upcoming Legislative session, along with lobbying for better wages for non-certificated, non-WEA school staff, such as paraeducators, office administrators, custodial, and kitchen staff, WEA president Larry Delaney told The Observer.

Officials from the Office of Financial Management said they opted to cut back on teacher bonuses to preserve money for programs that more directly impact student learning.

The state spent about $68M on certified teacher bonuses in 2024 and $77.6M in 2025, according to last year’s operating budget bill. 

While the Governor’s budget cut was framed as a “four-year pause”, the program exists in state statute and would need to be removed or delayed in the policy to effect the pause. Also, getting it back into the budget after four would be politically challenging, Delaney said. 

SK

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Inslee’s Year of Housing 3.0 wishlist

More than half a billion dollars could be coming for the Year of Housing 3.0 if Gov. Jay Inslee’s wish list holds water in the statehouse.

“If” is the operative word here, but Inslee’s Christmas catalog of to-dos for the Legislature has some big numbers best described as, dare we say it, historic. Bear with us while we throw some digits at you.

First, Inslee’s budget would pump $536 million into the state’s beleaguered Housing Trust Fund—a number just outshining the record $527M lawmakers put into it last biennium. That sum would pay for roughly 5,000 affordable homes or about 1% of the 500K the state needs to meet demand circa 2044, per the Department of Commerce’s estimates.⁴

His budget also assumes that money would build 21,400 more affordable homes through 2027. For reference, the Housing Trust Fund’s built around 58,600 said homes since its creation in the late 1980s.

In his last days in office, Gov. Jay Inslee rolled out his final budget proposal by entertaining the press with one final stunt on Tuesday: Declaring his wife, Trudi, Washingtonian of the Day, a title which comes with the apple pin pictured above. Photo by Tim Gruver.

Another $90M in the governor-for-now’s housing ask would fund a suite of programs aimed at renovating and cleaning up affordable housing projects.

Inslee’s budget would also launch a $10M pilot program for what it calls the Supporting Housing Affordability Infrastructure Program to help local governments cover the cost of impact fees. Said fees are infamous in the building world for slapping hefty one-time charges on new home construction to pay for things like parks, schools, and bus lines. In King County, school impact fees can cost up to $11K alone.⁵

That $10M would help build 700 more affordable homes or so the governor’s proposal claims. Where those homes spring up would hinge on state grants, which Inslee’s people tell us would be doled out by Commerce. The department would write the rule book on who gets what in that scenario.

TG

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Senn to head the Department of Child, Youth, and Family Services

Governor-elect Bob Ferguson is appointing Rep. Tana Senn, to lead the Department of Child, Youth, and Family Services, which oversees many of the state’s early learning and child care programs. 

Senn, D-Mercer Island, tells The Observer she aims to communicate, support, and serve families that interact with the agency, which touches child care and early learning, foster care, and justice-involved youth. 

Rep. Tana Senn, D-Mercer Island, pictured in front of a school bus. Senn’s bill to transition school districts to zero-emission school buses passed in 2024. Photo courtesy Elect Tana Senn.

In 2017, House Bill 1661 established the Department of Child, Youth, and Family Services,  which consolidated various government agencies into one “dedicated to the social, emotional and physical well-being of children, youth, and families,” according to a 2016 report from the Governor’s bipartisan Blue Ribbon Commission. In 2019 the agency’s mandate expanded to include juvenile justice. 

Senn tells us her goal is to implement the new policies lawmakers passed over the past six years and help families become more aware of the social services the state offers. 

“Are we implementing the great policies that we have passed? Are we communicating about what we’ve done through training and public awareness? The shift for me for this position is more about the implementation and the performance and the day-to-day impacts,” Senn said.

Senn has represented the 41st Legislative District, which includes Mercer Island, Bellevue, Newcastle, Renton, and Sammamish, in the House since 2013, and chaired the House Human Services, Youth, and Early Learning Committee since 2019.

Some of her landmark legislation includes 2021’s Fair Start for Kids Act, which funneled billions more into state-subsidized early learning and child care programs; 2018’s Equal Pay and Opportunity Act, which prohibits gender discrimination in the workplace; and 2024’s House Bill 1368 to electrify school buses. ⁶

Democratic precinct committee officers in the 41st Legislative District Democratic party will nominate three candidates to replace Senn. The King County Council gets the final choice.

SK

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Cash for World Cup cops

Inslee’s budget also includes $5.5 million for beefing up security in Seattle come June 2026 when the city welcomes the World Cup. The game is projected to bring in $929M and some 750,000 of its fans to our fair state plus a supply of soccer hooligans. Be prepared to take a raincheck on your date night downtown around then.

TG

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A dog for your mid-week

Fauci’s not convinced her bro got the memo on “gentle pats”. Want to see your pet in this space? Drop us a photo and some caption material.

1. We’re using round numbers to make the math easy for illustration purposes. And we’re assuming Jane has instructed her financial people to avoid the capital gains tax.

2. One of the bugs in Washington’s tax system is that very wealthy people spend a relatively small percentage of their money on taxable stuff, especially compared to people at the bottom of the economic ladder.

3. That Cascade Concrete, no bueno.

4. In housing policy lingo, affordable translates to 80% of area median income and below.

5. Seattle is among the few cities charging zero impact fees at the moment.

6. Conflict of Interest Disclaimer: In his prior life as a communications consultant, Paul worked on both the push to create DCYF and the initial advocacy for what would become the Fair Start for Kids Act. Part of that work involved taking Rep. Senn to see The Seattle Times editorial board.