Washington State’s recurring budget fights are often framed as a binary choice: raise sales taxes or cut services. That framing is convenient, familiar, and deeply misleading. The Legislature has far more tools available to fund the cost of government than it typically admits. What’s missing is not authority, but creativity — and the political will to use it.
Washington’s tax system is famously upside down. We rely heavily on sales taxes, excise taxes, and fees that fall hardest on people with the least ability to pay. Meanwhile, we lack the one tool that most states use to balance their systems: a graduated income tax. Courts have repeatedly blocked that path under existing constitutional interpretations, and political leaders have treated that reality as an immovable object.
But between the status quo and a full income tax, there is a wide, underexplored middle ground.
Government Costs Are Shaped by How We Live
One of the quiet truths of public finance is that how people are distributed across land matters enormously to the cost of government. Dense communities are cheaper to serve. Roads are shorter. Emergency response times are tighter. Utilities, transit, schools, and administrative services scale more efficiently. Even basic governance — inspections, maintenance, enforcement — costs less per person when people live closer together.
By contrast, large, sparsely occupied properties impose higher per-capita costs on the public. More lane-miles of road are needed per resident. Emergency services must cover larger areas. Infrastructure stretches farther to serve fewer people. None of this is controversial among planners or budget analysts; it’s well documented and already baked into how cities plan growth.
What is controversial is acknowledging this reality in how we raise revenue.
From Property Taxes to Occupancy and Service Demand
Washington’s Constitution tightly restricts property taxation, which has made lawmakers understandably cautious about anything that smells like a new land tax. But there is an important distinction that deserves more attention: ownership of land is not the same as the activity of occupying space and consuming public services.
The Legislature already charges people for activities rather than ownership all the time. We pay for water, sewer, stormwater management, waste collection, parking, tolls, and transit use. These are not taxes on property; they are charges tied to service demand.
The same logic can be extended further.
Rather than taxing land value or acreage, the state could design service-demand or public-service efficiency charges that reflect the real cost of providing government services based on settlement patterns. The goal would not be to punish rural living or mandate density, but to align public revenue with public cost.
Such a system could be structured to recognize that:
Extremely low-density occupancy is costly to serve per person, Moderate density often represents the most efficient “sweet spot,” and Well-planned higher-density development can reduce costs enough to justify credits or reductions.
Done carefully, this approach doesn’t tax ownership. It prices inefficiency.
Creativity Within Legal Constraints
Washington courts care deeply about substance over labels. A charge that is truly tied to service demand, is avoidable through changes in behavior or development patterns, and is grounded in measurable public costs stands on much firmer legal ground than a blanket property levy. The Legislature could anchor such charges in existing planning frameworks, such as the Growth Management Act, urban growth areas, and capital facilities plans — all of which already recognize the fiscal consequences of sprawl and inefficient development.
None of this is simple. Designing fair metrics, protecting privacy, and ensuring revenues are tied to relevant services requires careful statutory work. But complexity is not a reason for paralysis. It is a reason to govern.
And importantly, these kinds of approaches don’t have to be regressive. Credits can be built in for affordability, shared housing, and compliance with local plans. Charges can be structured to fall more heavily on patterns of use that drive costs, not on people with fewer resources.
The Limits of Workarounds
Still, even the most creative fee or charge is ultimately a workaround. It can improve fairness at the margins and better align costs with behavior, but it cannot fully fix Washington’s underlying revenue problem.
At some point — and that point is approaching faster than many politicians want to admit — the state will have to confront the fundamental issue: Washington’s Constitution prevents the state from adopting the single most effective and equitable revenue tool available to modern governments.
Every other year, lawmakers bend themselves into knots trying to fund schools, healthcare, infrastructure, and climate resilience with a tax code that leans hardest on consumption rather than ability to pay. Every year, the burden falls disproportionately on working families while wealth escapes largely untouched.
No amount of clever structuring can substitute for a truly progressive income tax.
Political Courage, Not Legal Ingenuity
The Legislature does have options today, if it is willing to be creative. It can rethink how service demand, settlement patterns, and public costs are reflected in the way we raise revenue. Those ideas deserve serious debate, not reflexive dismissal.
But creativity should not become an excuse to avoid the inevitable.
Sooner or later, someone in Olympia is going to have to say out loud what has been whispered for decades: Washington needs a constitutional amendment to allow a fair, graduated income tax. Not because government loves taxes, but because a functioning state requires stable, equitable revenue — and because asking the lowest-income residents to shoulder the largest share is neither sustainable nor just.
When that moment comes, it won’t be won by clever accounting or legal finesse. It will require political courage. And the longer we delay, the more expensive that courage will become.
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