(The Center Square) – Documents obtained by a Seattle radio talk show host indicate the possibility of Washington lawmakers passing an income tax on those making more than a million dollars a year could hurt the odds of Seattle getting an NBA franchise team back in the city.
For years, basketball fans of the former Seattle SuperSonics have held rallies, and urged officials and stakeholders to do everything possible to bring the team back to the city.
According to the documents obtained by KVI’s Ari Hoffman and posted to X Wednesday, Gov Bob Ferguson's team was urged to prep him earlier this month for a meeting with NBA Commissioner Adam Silver.
"Commissioner Silver is fully committed to returning the Sonics to Seattle but emphasizes the importance of doing it right this time to ensure the team’s long-term stability in the city,” read the document.
Ferguson was reportedly urged to be prepared to discuss concerns over:
• The high cost of maintaining a basketball team
• The impact of employer layoffs i.e. “fewer employees equals fewer ticket sales”
• Challenges posed by the millionaire’s tax on recruiting top players
• Whether Seattle remains an attractive and investor-friendly environment
The Center Square reached out to Ferguson’s office for comment on the document and meeting with the NBA commissioner but did not receive a response.
The Center Square also reached out to the prime sponsor of SB 6346, Sen. Jamie Pedersen, D-Seattle, for comment on the concerns about the income tax potentially nixing the Sonic’s return but did not hear back.
Pedersen did respond to a question Wednesday during a media availability as to what he thinks about the likelihood wealthy Washingtonians and businesses will leave the state if they pass an income tax.
“I don’t think that there’s going to be any significant change in taxpayer location as a result of the passage of the tax,” said Pedersen.
Senate Minority Leader John Braun, R-Centralia, told The Center Square the NBA’s concerns about a Washington income tax should be a warning to Democrats pushing the bill.
“This type of decision making is going to happen over and over again as people make decisions on whether to stay in Washington or leave and whether they come to begin with,” said Braun. “Nobody wants to leave, it’s that they’re going to have to leave."
Braun said Washington businesses will be at a competitive disadvantage if the income tax is passed.
“They can’t afford to give up 10% to competitors in other parts of the country and other parts of the world," he said. "They’re going to have to leave or they’re going to fail eventually."
GOP Chairman Jim Walsh of Aberdeen shared the same sentiment.
“There's a difference between chasing business away and attracting business. The whole sort of disingenuous rationalization and defense of the governor's state income tax is that people won't leave. I believe that's wrong but set that aside. What about the businesses you're trying to attract? What about the next Amazon? What about the next generation of attracting a professional sports team that isn't here now? These bad fiscal decisions make attracting business to Washington, practically impossible,” said Walsh.
Sen. Chris Gildon is the Senate Republican Leader on the operating budget and told The Center Square that the income tax creates an environment that is “hostile to business and success.”
“Probably a lot of people are just silently taking their business and moving elsewhere without a lot of fanfare,” said Gildon. “Mount Rainier is really beautiful, but if it comes at the choice of seeing Mount Rainier or being able to grow your business and pass on something to your kids, I think most people are going to pick their kids.”
Figures from the federal government on people coming into Washington or leaving the state after implementation of the state’s capital gains tax suggest many Washingtonians picked up and left.
Total outflow for Washington from 2021 to 2022 was 222,533 individuals, (taxpayers and dependents). Total inflow for WA was 203,735 individuals, equaling a net migration loss of 18,798 residents.
The net adjusted gross income loss was $1.66 billion ($14.62 billion out vs. $12.96 billion in)
Related to this and just coming off the heals of the Seattle Seahawks winning the Super Bowl and the team going up for sale comes concern that the pending income tax could propel a move out of state.
The proposed 9.9% "millionaire's income tax would include a component that would force high-earning visiting athletes and performers to pay income tax on earnings generated during their time in the state.
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