Capital gains tax initiative not scheduled for hearing, likely headed for ballot

Initiative 2109 is one of six initiatives to the Legislature introduced in 2024. It would repeal the state capital gains tax, which was adopted in 2021 and began collections in 2022.

The state fiscal note estimates that the impact to the state budget if I-2109 were passed this session prior to the April 15 deadline for 2024 collections would be $1.4 billion in the current 2023-25 biennium and $1.8 billion in 2025-27. The funding is dedicated to education: the education legacy trust account (up to a specific amount) and surplus funds collected above that amount to the school construction account.

This is one of six initiatives to the Legislature that has been introduced this session, and the Legislature has three options on actions it can take:

• Adopt the initiative into law as presented.
• Adopt an alternative to the initiative, and then both the alternative and the original initiative are sent to the voters.
• Take no action and allow the initiative to go to the voters.

Unlike several other proposed initiatives, I-2109 was not scheduled for a hearing this week and will be headed to the November ballot.

This information is intended for educational purposes only and not as support or opposition to a ballot measure. AWC’s role is to provide factual educational information on the potential impacts of an initiative on cities. City elected officials may take positions on ballot measures, including statewide initiatives, using specific exceptions to the prohibition on use of public resources. City officials should familiarize themselves with PDC rules regarding ballot measures.