Washington's public-sector unions are throwing down millions of dollars to keep the state's new high-earners income tax in place and fight an initiative seeking to repeal it.

The Washington Education Association plopped $2 million last week into the campaign against Initiative 645, bringing its total to $3 million and making the teachers union the largest single donor so far in the November ballot fight.

Unions representing state employees and publicly funded healthcare workers have also contributed seven-figure checks, juicing the No on 645 campaign's barrage of TV ads, which started this week.

It's a lopsided fight so far as voters prepare to pass judgment on the tax.

In all, the No on Initiative 645 campaign has raised $7.8 million, far outpacing the $1.3 million for the Vote Yes Repeal the Income Tax campaign that is supporting I-645. Let's Go Washington, which ran the signature drive to get the initiative on the ballot, has raised another $3.7 million, some for initiatives concerning transgender athletes and parental rights.

The big labor donations spotlight the stakes for the influential public-sector unions, whose members' jobs and salaries and the services they provide depend on the tax dollars flowing to the state budget.

"It’s a self-sustaining money machine for the interests that are funding it," said Steve Gordon, a retired Pierce County trucking company owner and executive who chairs the yes on I-645 campaign, criticizing the role of the public-employee unions who also fund the campaigns of Democratic elected officials.

The new income tax, dubbed the "millionaires tax" by supporters, imposes a 9.9% levy on annual household earnings above $1 million. It's projected to bring in more than $3 billion a year, but collections won't start until 2029 — and won't happen at all if voters pass I-645.

Financial pressures are growing on the state budget despite billions in new taxes, including the income tax, approved over the past two years by Gov. Bob Ferguson and the Legislature.

The Washington Federation of State Employees recently staged walk-offs to protest Ferguson's insistence that the state can't afford to offer pay raises next year.

Mike Yestramski, president of the union, said saving the income tax will help fix the state's regressive tax code and prevent "austerity cuts" to state services.

Tani Lindquist, vice president of the teachers union, said educators fear a repeal of the new tax would punch a multibillion-dollar hole in the state budget, which funds K-12 education.

Given that threat, she said the union's $3 million political donation — funded by union dues — is well worth it.

"We are super-conscious that every penny we spend comes straight from our members' pockets," Lindquist said. "They know it will be devastating to public schools and social programs if this gets repealed."

SEIU 775, which represents long-term care workers, is also negotiating with the state over higher wages for its members, who care for elderly and disabled people.

"We think it's entirely reasonable to ask the wealthiest among us to pay a little bit more," said Adam Glickman, SEIU 775 secretary-treasurer. Union caregivers making $22 an hour pay 16% or more of their income in taxes, he said, while the richest Washingtonians pay 3% due to the state's reliance on sales taxes.

Proceeds from the high-earners income tax, which will be paid by an estimated 25,000 households, will be mostly devoted to the general state operating budget, with 5% earmarked for childcare and early learning subsidies. Some of the money will also pay for expanding the state's Working Families Tax Credit.

"It's clearly going to benefit low-income workers and working families," Glickman said.

SEIU has donated nearly $2 million to the campaign against I-645. The state employees union has given $1 million. Some national union groups and wealthy local philanthropists have also chipped in.

The contributions are funding TV ads opposing I-645 that started this week, with a 30-second spot featuring a teacher, a nurse and a small-business owner. The ad laments the state's "upside-down tax code" and argues I-645 would give millionaires and billionaires a tax break "while the rest of us pay more."

On the other side, the campaign to repeal the new income tax has been largely bankrolled by individual business owners and firms who oppose paying the tax and argue it will eliminate Washington's current competitive advantage as one of nine states with no income tax.

They're pointing to warning signs, including tech layoffs and a rise in home listings — that wealthy people are already making plans to flee Washington amid what they see as demonization of businesses.

"All the politicians don’t want to believe that – they are going to suffer the adverse consequences of what is happening on the ground," said Matt McIlwain, managing director of the Seattle venture capital firm Madrona Venture Group, which invests in healthcare, artificial intelligence and other startups.

Madrona recently donated $250,000 to the campaign seeking to repeal the tax, making it one of its top donors so far.

Meg Gluth, who owns Catalynt, an Edmonds-based chemical and manufacturing company, said the business and tax climate is leading her to pull back on investments in Washington and consider moving business elsewhere.

"In this world of remote work, there is this conversation of do I even need to be located here anymore... I am getting to a point personally where I can't afford to," she said.

Gluth's company has donated $50,000 to the income tax repeal campaign.

Some of the state's biggest business players — including Microsoft and Amazon — have notably remained on the sidelines of the I-645 debate. They've been more concerned about staving off other tax proposals floated by Democrats, such as a wealth tax or a statewide payroll tax similar to Seattle's JumpStart tax.

Gordon and his relatives and businesses have donated $800,000 to the Yes on I-645 campaign and Let's Go Washington. Other top donors so far include Bellevue developer Kemper Freeman and Brian Heywood, the Redmond hedge fund manager who leads Let's Go Washington.

Let's Go Washington has also received more than $145,000 in small donations, reflecting public concerns that the tax will inevitably pull in more than just millionaires.

"All the writing is on the wall that they are going to expand this to more income levels in Washington, said Jaime Herrera Beutler, the former Southwest Washington Republican member of Congress who has joined the I-645 campaign as a spokesperson.

The I-645 campaign has started radio ads echoing that argument, which the tax's supporters have rejected as fearmongering.

Ferguson has publicly vowed to veto any expansion of the tax to lower income brackets.

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