‘Self-inflicted, avoidable wound’: Architect losing work over WA income tax heads to Idaho for new business

Washington’s new income tax isn’t set to take effect until 2028. Still, a Seattle-area architect told “The John Curley Show” on KIRO Newsradio the damage is already being felt, including the cancellation of a $20 million custom home project and three layoffs at his firm.

Mark Elster, managing director of AOME Architects, spoke at a Yes on I-645 event at the Bellevue Club, where supporters of the income tax repeal gathered to make their case ahead of the Nov. 3 vote.

“One of our clients on one of these major projects announced to us a few weeks ago that they were canceling their project after we were significantly into it,” Elster said. “They canceled it, citing the proximal cause as the millionaires tax, mentioned the pre-existing estate tax and other factors, and just the general hostility towards the wealthy or the productive class that’s exhibited in this state by lawmakers.”

Elster said the client had already committed roughly $1 million to move the project forward, making the cancellation highly unusual for that stage of development.

KIRO host John Curley asked how many people are affected when a project of that size disappears. Elster said the ripple effect touches far more workers than most people realize.

“Easily 1,000 people when you trace it all out,” Elster said. “When a client leaves or pauses their project, those jobs contract or they disappear altogether in Washington. They don’t relocate with a client. They’re stuck here with the bill, and none of them are millionaires.”

Elster said he has organized 36 to 40 architects, contractors and subcontractors who are all reporting similar losses, including one major contractor with 40 to 50 employees whose clients have canceled six to eight projects or announced plans to relocate to another state.

Elster fires back at lawmakers who call capital flight ‘a myth’

Curley played clips from Sen. Jamie Pedersen, Rep. Timm Ormsby and Rep. Natasha Hill dismissing the idea of capital flight from Washington. Elster said lawmakers aren’t hearing about cancellations because they don’t generate press releases or government statistics.

“My client, when they announced they’re canceling their project, there was no press release,” Elster said. “There was no announcement or a government statistic recorded. So of course they’re not hearing about it. They don’t pay attention to what’s happening on the ground.”

A recent Association of Washington Business survey of 400 employers found that 24% are considering leaving the state, up from 17% just months earlier.

Curley also played audio of New York Gov. Kathy Hochul telling wealthy residents to “get out of town” in 2022, then reversing course two and a half years later, saying, “Maybe the first step should be to go down to Palm Beach and see who we can bring back home because our tax base has been eroded.”

Elster compared the situation to the fable of the golden goose.

“Well-meaning politicians see a golden goose laying eggs, and they squeeze as hard as they can, believing that it will squeeze more eggs out,” Elster said. “Not realizing that goose, if it’s wise, will fly the coop and leave to escape the impending doom, or they’ll succumb and die, and either way, the egg flow stops.”

Elster said his firm is already adapting. Next week, he and his sales director are heading to the lakes region around Coeur d’Alene and Hayden Lake in Idaho, where he said wealthy Washingtonians are increasingly relocating.

“Some of that capital flight they deny is happening is going to Idaho,” Elster said. “We’re going to dip our toe in that water and see if we can expand our regional coverage to compensate for the coming contraction.”

Curley asked if Elster would close up shop or leave the state. Elster said he intends to stay.

“I’m determined to persevere,” Elster said. “I’ve been through other economic hardships with different causes than this one, but this one is definitely a self-inflicted, avoidable wound.”

Watch the full discussion in the video above.

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