A new quarterly survey from the Association of Washington Business (AWB) finds Washington employers growing markedly more pessimistic about the state economy — and increasingly open to leaving.
According to AWB’s Winter 2026 Washington Employers Survey, 44% of business leaders said they are considering moving their personal residence out of Washington, most often naming Arizona, Idaho, Montana, or Wyoming. Separately, the share of employers considering moving their business out of state nearly doubled over the past year, rising from 9% to 17%. Respondents most frequently cited taxes and the rising cost of living as the reasons.
AWB President Kris Johnson said the trend reflects a deeper slide in confidence that hasn’t rebounded since lawmakers approved what AWB and partner business groups described as the largest tax increase in state history last year. “Washington employers are growing more pessimistic… largely because of the rising tax burden,” Johnson said, warning that small and mid-sized businesses are “under severe strain” as lawmakers debate additional taxes.
The survey shows taxes remain the top challenge for employers (64%), followed closely by health care costs (62%) and government regulations (54%). While concern about inflation has eased compared to a year ago, it still ranks among the leading worries. More than half of the respondents also reported negative impacts from tariffs.
The report lands as Democrats in Olympia push Senate Bill 6346, a proposal that would impose a 9.9% tax on annual income above $1 million — a plan supporters claim is a “millionaires tax” and opponents say will open the door to a state income tax.
Critics also argue that the policy is already producing hypocrisy at the top. During his testimony opposing the millionaire’s tax on Friday, Let’s Go Washington founder Brian Heywood called out progressive billionaire Nick Hanauer even domiciled out of Washington state to avoid the taxes he helped to pass.
Republicans have argued the legislation is designed to normalize a new income tax and eventually expand it. On The Ari Hoffman Show on Talk Radio 570 KVI, Rep. Jim Walsh warned the tax wouldn’t stay limited to high earners. Over 60,000 people registered with the legislature in opposition of the tax, shattering previous testimony records.