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Dear Friends and Neighbors,
Each spring, the cherry blossoms on the Capitol Campus burst into color. The flowers signal the close of the legislative session. With only a couple of weeks left, several public policy decisions remain on the table. Lawmakers will spend the next few days debating and voting on measures that passed out from the opposite chamber. Wednesday, April 17, marks the passing of another legislative deadline, opposite chamber cutoff. Only budget matters, initiatives and bills necessary to implement the budget can be considered after that date.
Budget proposals
Now that the Senate and House have approved their respective state operating budget proposals, negotiators will meet to reconcile the differences in the spending plans. An agreement must be reached and a final proposal submitted to the Legislature before the conclusion of the regularly scheduled session on April 28.
Although our state continues to enjoy its best financial position in years, both of the Democrat-sponsored plans propose significant tax hikes. It’s disappointing that despite historic levels of state revenue—with a state budget surplus of more than $2.8 billion — the question is not whether tax increases will be passed, but how high they will go.
Proposed tax increases
The House’s spending plan depends primarily on an income tax on capital gains earnings, adjustments to the real estate excise tax (REET), and increases to certain business and occupation (B&O) taxes. The Senate version uses revenue gained from tax changes to REET. However, a separate bill, Senate Bill 5961, also seeks to impose an 8.9% income tax on capital gains. With similar spending levels, the Senate’s proposal is about $1 billion less than the House.
Want more information on the Senate and House budget proposals? Here are some resources:
- Democrat-sponsored House and Senate 2019-21 biennium operating budget proposals
- A Citizens Guide to the Washington State Budget (2019)
- Washington State’s Revenue Forecast
“Hold harmless” funding for school districts
House Republicans managed to make several critical changes to the budget proposal. One of the most important has to do with education funding. During the 2018 McCleary negotiations, we promised school districts their monies would not be reduced by the K-12 education funding reforms. We need to keep that promise. That’s why I sponsored an amendment offering one-time funding to districts receiving less funding this year as compared to 2017-18. This change would help several struggling school districts across our state.
Other key Republican-sponsored improvements include:
- Providing a cost-of-living adjustment for retired teachers and public employees.
- Increasing transportation funding for homeless youth and foster children so they can stay in their school district.
- Increasing Medicaid fraud enforcement, which could save $240 million.
- Providing for more local drug and gang policing in response to the opioid epidemic.
- Funding programs to reduce veteran suicides.
Thank you!
Thank you to everyone who has shared their opinions and comments on the proposed budgets and their accompanying tax increases. I share your concerns. With economists predicting a downturn in our economy, committing all our state’s revenue dollars and adding more taxes sets our state up for painful fiscal cuts in the future. Along with my Republican colleagues, we’ll continue to do all we can to shift our state into a more fiscally responsible approach.
If you have any questions on the budget proposals discussed in this update or other state government-related matters, please feel free to give me a call. My contact information is listed below.
It is an honor to serve you.
Sincerely,
Mike Steele
