Many dismissed concerns about corporate flight, claiming it was just a misconception. Now, it’s become a cautionary tale.
The largest companies in Washington were aware of impending tax hikes.
They informed Governor Bob Ferguson that this move would adversely affect the business environment in the state.
Yet, rather than taking heed of their warnings, he attempted in secret to persuade them that these tax increases would be beneficial. Clearly, he did not succeed.
This insight comes from public records.
When I learned of Starbucks’ departure plans, a nagging feeling lingered—something seemed off.
A major Seattle-based firm isn’t going to announce a $100 million investment for a new corporate hub in Nashville, let go of employees in Seattle, and plan to hire 2,000 in Tennessee without some prior discussions occurring.
Starbucks, being one of Washington’s most influential companies and a key player in Seattle’s economy, likely faced attempts to change their mind.
So, I filed a public records request, and what I discovered was a glimpse into the challenges faced by Washington voters.
Documents indicate that Starbucks alerted Ferguson in 2025 that certain tax proposals would negatively impact the business climate.
The company emphasized that taxing core functions like staffing and IT would “significantly increase costs” and “put state-based companies at a disadvantage.”
They also expressed concerns that new business and occupation taxes would hinder investments in Washington.
In spite of this, Ferguson proceeded to enact the most significant tax increase in state history that year.
In February, Starbucks CEO Brian Nicol sought a meeting with Ferguson, but they never met.
Instead, the state introduced its first income tax.
It wasn’t until Starbucks announced its plans in Nashville that the governor finally reached out for a meeting. His team prepared him for the discussion.
They noted, “The Nashville acquisition along with ongoing layoffs in Washington has prompted public questions about whether the company is gradually shifting its focus.”
They also anticipated Nicol would raise concerns about 2025 tax hikes and the new income tax.
However, Ferguson’s approach wasn’t to reconsider the policies; instead, it was about promoting them.
His briefing included key points aimed at demonstrating why Washington remains a favorable business environment despite the tax hikes.
“Just as you’ve emphasized returning Starbucks to its core values, my focus is on restoring Washington’s essential public services,” one excerpt stated.
The underlying idea was straightforward: higher taxes would fund improved schools, roads, and public services, which in turn would help businesses.
However, the fallout was evident—two rounds of corporate and retail layoffs saw around 1,300 jobs lost in Washington, with about 40 stores closing for good.
Employment at Starbucks’ Seattle headquarters fell from roughly 3,750 in 2023 to about 2,800.
Records also highlighted that Nicol considered security around Starbucks’ Seattle location to be a significant issue.
This prompted me to investigate further. Was Starbucks alone in this situation?
It turned out they were not.
T-Mobile also wrote to lawmakers, cautioning that Washington’s expanded sales tax on advertising would unfairly tax companies that keep headquarters jobs in the state.
CEO Srini Gopalan indicated that “companies with headquarters in Washington and who have marketing teams here will be impacted by this tax,” whereas “those based outside will not.”
Nevertheless, lawmakers retained the tax.
T-Mobile has since laid off around 400 employees in Washington while continuing to grow its campuses in Kansas, Texas, and Georgia.
Before a meeting with NBA commissioner Adam Silver, Ferguson received another briefing memo discussing potential barriers to the Seattle SuperSonics returning.
Among the anticipated issues were queries about how income taxes might affect the recruitment of top players and whether Seattle would remain attractive for investors given that major firms and leaders are moving to Florida.
The larger corporations were not caught by surprise by governors or lawmakers after decisions had already been made.
They had previously communicated to state leaders, through written warnings, that Democratic tax policies diminished Washington’s competitiveness.
The governor, his staff, and lawmakers were well aware.
Conversations were occurring. Warnings had been issued. Concerns were noted.
Yet, the general public was left out of those discussions.
In the first half of 2026, Seattle-area startups raised only $2.7 billion across 163 venture capital deals, marking a 40% drop from $4.5 billion in 210 deals the previous year.
Seattle has slipped from fifth to seventh among the largest venture capital markets in the U.S. regarding investment value, and last in the number of deals during that period.
Since January, major tech companies like Microsoft, Amazon, and Meta have eliminated tens of thousands of jobs in Washington.
The office vacancy rate in Seattle stands at approximately 37%, while the unemployment rate statewide is 5.2%, over a point higher than the national average.
Repeatedly, Washington’s largest employers have alerted state leaders that increasing taxes would diminish the state’s competitiveness.
These reports weren’t overlooked because officials weren’t aware; rather, they were dismissed because there was a lack of concern.
And now, Washington is facing the repercussions.
