Archive for Budget

House Democrats roll out $38.8 billion budget proposal, new taxes

By | March 27, 2015 | 0 Comments

House Democrats on Friday released a $38.8 billion budget proposal that includes $1.4 billion in new taxes, including a new capital gains tax and changes to the business and occupation tax.

Money raised from the new taxes would fund education, including operating costs, all-day kindergarten, smaller class sizes through the 3rd grade and college readiness programs.

“Without investment, you can’t have a return on investment. That’s what this budget is,” said House Majority Leader Pat Sullivan at the budget rollout on Friday.

The budget spends an additional $588 million in cost-of-living pay raises and health benefits for teachers. While allocating $412 million to reduce class sizes for kindergarten through 3rd grade, it does not fully fund Initiative 1351, the class size reduction measure passed by voters last year.

Lead budget writer Rep. Ross Hunter said he believes the budget meets the mandate to fully fund basic education in the McCleary decision by the state Supreme Court. “I think the court will be fine with this,” he said.

The budget would freeze tuition at the state’s colleges and universities for the next two years, and also provide $8 million dollars for a new Washington State University medical school that was given the green light to open by the Legislature this week.

The budget also funds more mental health beds in community facilities and state hospitals, as well as $5.1 million for “Joel’s Law.” The bill is named after Joel Reuter, who was shot by Seattle police after having a mental health breakdown. It allows families to appeal to a court if mental health professionals decide not to involuntarily commit someone who is mentally ill.

“We want to make sure people can get the help they need at the time they are having a crisis,” Hunter told reporters.

Among the largest sources of  new revenue is a capital gains tax, which would raise about $570 million for the two-year budget.

Individuals who earn more than $25,000 in profits on the sales of stocks and bonds, or married joint filers earning more than $50,000 in profits, would pay a 5 percent capital gains tax under the proposal. It would not apply to retirement accounts.

Budget leaders estimate about 32,000 Washington residents would begin paying the capital gains tax starting in 2016. “This is for the super wealthy,” said Rep. Reuven Carlyle, D-Seattle.

Critics say the capital gains tax is too volatile to use as a reliable source of revenue, which Democrats acknowledge. “We’re not pretending anything other than that,” said Carlyle.

To protect against fluctuations, Carlyle said the budget only counts on $400 million a year from the capital gains tax to go toward paying for basic education requirements. Any additional money raised above that threshold would go into a higher education fund.

Another $532 million in new revenue would come from changes to the business and occupation tax. It would increase the B&O tax by 0.3 percentage points for certain businesses, while also reducing or eliminating the tax for about 15,000 small businesses.

Online retailers that do not have a physical presence in Washington — such as eBay or Etsy — would be required to start collecting tax from online transactions. Currently, only companies with an presence in Washington, like Amazon, collect tax from online sales.

Democrats also propose eliminating several tax breaks. Out-of-state residents would no longer be exempted from paying sales tax when they shop in Washington, and sales tax would be added to the cost of bottled water. It also eliminates a tax break for oil refiners and other industries, including travel agents.

Lead Republican budget writer Sen. Andy Hill criticized the budget for imposing new taxes when the state has $3 billion in new revenue coming into the state. “When you don’t use that to pay for education and instead you use taxes – quite frankly, I don’t know if that’s unconstitutional or just unconscionable,” he said. (more…)

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House Democrats to release budget proposal on Friday, TVW will carry live

By | March 25, 2015 | 0 Comments

Update Thursday March 26, 5 p.m.: The Friday March 27 Appropriations meeting was canceled. The next Appropriations meeting is scheduled for 1:30 p.m. Monday.

Fiscal committee leaders Rep. Ross Hunter, D-Medina, and Rep. Reuven Carlyle, D-Seattle, plan to release details on the House’s proposed 2015-17 budget package at 11:30 a.m. Friday.

Hunter is head of the House Appropriations Committee and Carlyle is the finance chair.

The chambers take turns taking the first shot at the state’s two-year budget. Senate Republicans will release their proposal at a later date.

TVW will be live with the press conference at 11:30 a.m. Friday at this link.

Categories: Budget

Republican leaders say budget talks progressing

By | March 18, 2015 | 0 Comments

As a March 23 goal for the release of the House budget gets closer, Republican leaders expressed hope that the Washington Legislature will pass a budget by the scheduled final day of session — the last Sunday in April.

The legislative chambers take turns releasing the first version of two-year budgets; this year, it is the House’s turn and the Senate will follow. In past years, tussling over the two-year budget has resulted in special sessions and preparations for possible government shutdowns.

Gov. Jay Inslee has already released his $39 billion two-year budget, which includes a capital gains tax.

This year, lawmakers have to deal with requirements of the McCleary ruling, which requires a boost in spending for K-12 education.

Rep. Dan Kristiansen

Rep. Dan Kristiansen

But Minority Leader Dan Kristiansen, R-Snohomish County, said at a press conference Tuesday that he was hopeful that lawmakers were making progress.

“I think we’re on the trajectory right now to get out on time,” Kristiansen said.

Kristiansen said his caucus will be closely watching for new spending in the House’s budget.

“My  concern is that we put out a budget that will have a lot of expenditures that is going to need a lot of tax revenue,” Kristiansen said. “We believe… that we can’t put out a budget with a bunch of new revenue, if any, and it’s going to come down to priorities.”

However, Kristiansen characterized the budget discussions, which is led by the Democrats in majority in the House, as collaborative.

“We have never seen so much dialogue, collaboration amongst the budget writers on both sides of the aisle working together, even from my perspective in the House,” he said. “I’ve got my budget writers, alongside Democrat budget writers working together several times a week, even outside of committee.”

Inslee, at a press conference earlier on Tuesday, also characterized the Legislature’s talks as productive.

“I think legislators have done well so far this year, in trying to prepare for the serious heavy lifting of the budget,” Inslee said. “So, I report that legislators are on a good track on this.”

However, at a press conference on Monday, Majority Leader Rep. Pat Sullivan, D-Covington, says his caucus was still considering a budget release by next week, but declined to commit to a day

“It’s when we finish our work,” he said.

Categories: Budget

Revenue forecast shows moderate increase as lawmakers craft budget

By | February 20, 2015 | 0 Comments

Budget writers will have an additional $140 million to work with as they develop the state’s next two-year budget, according to figures released Friday by the Economic and Revenue Forecast Council.

Washington is seeing strong job growth — especially in Seattle — and consumers are saving money from lower gas prices, said the state’s chief economist Steve Lerch. However, the state has collected slightly less revenue from legal marijuana than forecasted. The slowdown at the ports is also having an economic impact, although so far it is only affecting volume and not dollars, Lerch said.

The budget for the 2015-2017 cycle remains at about $37 billion, leaving legislators with a $2 billion dollar shortfall as they attempt to meet education funding mandates.

Rep. Ross Hunter, the lead Democratic budget writer in the House, said the updated figures make a “difficult problem slightly less difficult.” The House is expected to release its budget proposal in mid-to-late March.

The forecast also includes an additional $134 million for the current budget cycle, raising total collections to $274 million through 2017.

Republican lead budget writer Sen. Andy Hill said the additional revenue should “reduce the pressure on the perennial call for more taxes.” The Senate will release its own version of the budget after the House. Gov. Jay Inslee‘s budget was announced in December.

Watch the revenue forecast at this link.

Categories: Budget

Republicans say Inslee proposals would risk economy

By | January 13, 2015 | 0 Comments

Screen shot of Rep. Norma Smith (R-Clinton) delivering the Republican perspective on Jan. 13, 2015.

Rep. Norma Smith (R-Clinton) and Republicans in the Senate and House rebutted major points in Gov. Jay Inslee‘s State of the State address, saying his proposed policies would damage economic growth and would be unnecessary.

“His proposals do, indeed, have a cost. They would increase the cost of our food, our utility bills, and our fuel to get to and from work. And they would hit hard our rural communities,” said Smith, in the remarks delivered in the Republican response to the State of the State.

“Why then, would you put on the table any proposal that has in its crosshairs the very sector of our economy most crucial to our economic recovery and vitality?” she said.

She also said that there has been bipartisan support for such environmental policies as cleaning up waterways and toxic sites, and that she personally is committed to developing renewable energy, but that “there is room for on this issue for reasonable debate.”

“The governor says we need to create a new fuel mandate and new taxes to demonstrate leadership. But his proposals will have almost zero impact on the global challenges we are facing,” Smith said.

“We are absolutely willing to consider pollution-reducing ideas that will work, and that won’t place such a terrible burden on the hard-working people of Washington state, particularly those in the middle class, and those who are struggling,” she said.

Smith also said that the state can fund education through a combination of changes in policy and an additional $3 billion in revenue than originally forecast.

“If we are thoughtful and careful about how we spend your tax dollars, and prioritize, we can balance our state budget without tax increases,” Smith said.

“[W]e must rectify the failure of the past three decades, where leadership in Olympia has allowed non-education spending to dramatically outpace education spending. Simply put: education has not been the top priority. Funding education first would change that,” she said.

Smith joined fellow Republicans representatives Joel Kretz (R-Wauconda) and Dan Kristiansen (R-Snohomish) and senators Ann Rivers (R-La Center), Mark Schoesler (R-Ritzville) and Linda Evans Parlette (R-Wenatchee) to rebut other parts of the governor’s address, and to answer questions from the media.


Categories: Budget, Education, Republicans

Live from the Capitol: TVW’s opening day show starts 10 a.m. Monday

By | January 9, 2015 | 0 Comments

The Washington State Legislature’s 2015 session begins Monday, Jan. 12. Opening ceremonies start at noon, but tune in to TVW early to catch exclusive interviews with lawmakers, who will discuss key issues for the coming months.

Starting at 10 a.m., The Impact’s Anita Kissee will host the live show from the Capitol rotunda. Gov. Jay Inslee will stop by to talk about his budget proposal and more.

Guests include House and Senate leadership from both sides of the aisle, including Senators Sharon Nelson, Mark Schoesler, Andy Billig, Linda Evans Parlette and Representatives Dan Kristiansen, Pat Sullivan, Joel Kretz and Eric Pettigrew.

Hear about key issues including education, transportation and mental health from Senators Jeannie Darneille, Doug Ericksen, Curtis King, Steve Litzow, Rosemary McAuliffe, John McCoy and Steve O’Ban, plus Representatives Judy Clibborn, Hans Dunshee, Richard DeBolt, Cary Condotta and Sharon Wylie.

We’ll also get insight about the session from Capitol reporters Jim Camden of The Spokesman-Review and Jordan Schrader from The News Tribune.

TVW will carry gavel-to-gavel coverage of opening ceremonies beginning at noon.

Stay tuned to TVW throughout the session for coverage of the state Legislature. Starting opening day of session, Legislative Review will air nightly at 6:30 and 11 p.m. “The Impact” airs Wednesdays at 7 and 10 p.m. and Inside Olympia with Austin Jenkins is Thursdays at 7 and 10 p.m.

Lawmakers spar over proposed capital gains tax

By | January 8, 2015 | 0 Comments

The debate over Gov. Jay Inslee‘s proposed capital gains tax continued along party lines at Thursday’s Associated Press Legislative Preview event.

The tax was debated on a budget panel that included Rep. Ross Hunter (D-Medina), chairman of the House Appropriations Committee; Sen. Andy Hill (R-Redmond) chairman of the Senate Ways and Means Committee; Rep. Bruce Chandler (R-Granger), ranking Republican on the House Appropriations Committee; Sen. Karen Fraser (D-Olympia), member of the Senate Ways and Means Committee.

Inslee last month proposed a $39 billion 2015-17 budget that ends a number of tax breaks, charges carbon polluting companies and raises $800 million over two years through a proposed capital gains tax. The proposed capital gains tax would be 7 percent on money made from the sale of stocks and bonds above $25,000 for individuals and $50,000 for joint filers — which lawmakers say would affect the top 1 percent of earners in Washington state.

Inslee, in his Q&A session, defended his proposal of a capital gains tax, saying it gets the state closer to a system that can get the benefit of people earning more money without also increasing the tax burden on lower-income and middle-income earners.

“If we can tax higher income folks when they get capital gains, and not lower income folks when they buy a pair of shoes, that’s good,” he said.

“Whatever the concerns on the volatility of the capital gains tax, the alternative is zero,” Inslee said.

Sen. Andy Hill (R-Redmond)

Sen. Andy Hill (R-Redmond)

Hill criticized Inslee’s budget as perpetuating what he called a “deficit myth,” in which the only option was to raise taxes.

He said that because the state’s revenue has risen by more than 4 percent in each of the past two years, the state can continue its existing services and put an additional $1 billion in state education funding over two years.

“When I’m talking with business groups, I ask, ‘Would you like 4 percent growth year over year in this economy,’ ” he said. “I see nods. With some I see a little drool.”

“To say we have a huge budget problem, I think it’s meant to scare people,” Hill said. “The next step is you have to raise taxes.”

Hill also said that a capital gains tax is too unpredictable to be a reliable source of funding for school education, which was one of the requirements under the McCleary ruling. (more…)

Categories: Budget, WA House, WA Senate
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Lawmakers offer preview of 2015 session at Washington Policy Center summit in Bellevue

By | January 7, 2015 | 0 Comments

It wasn’t quite a debate, but the differences were clear in presentations on state legislative priorities given by Sen. Andy Hill (R-Redmond) and Rep. Reuven Carlyle (D-Seattle) at the Washington Policy Center’s Solutions Summit in Bellevue on Wednesday.

Sen. Andy Hill (R-Redmond) and Rep. Reuven Carlyle (D-Seattle) speak at the Washington Policy Center's Solutions Summit in Bellevue on Wednesday.

Rep. Reuven Carlyle (D-Seattle), seated, and Sen. Andy Hill (R-Redmond) speak at the Washington Policy Center's Solutions Summit in Bellevue on Wednesday.

Hill made the argument that the surplus in the state revenues would allow for an additional $1 billion in education spending and cover existing expenses over the next biennium.

However, Hill, the Senate Ways & Means chairman, criticized Gov. Jay Inslee‘s proposed new capital gains tax in his $39 billion, two-year budget, which the governor introduced last month.

“We do not have a brutal deficit,” Hill said. “It’s a false choice to say you raise taxes or you make cuts.”

Carlyle, the House Finance chairman, was critical of Washington’s taxing system as a whole, which he says squeezes middle- and lower-income taxpayers as well as small businesses. But Carlyle was also skeptical of the idea that the spending side of a budget should get the most scrutiny. He said many of the state’s tax exemptions to businesses have not been revisited since they were passed.

“I believe the best tax structure would be low rates, broadly applied with few exemptions,” he said.

The Washington Policy Center, a pro-business think tank, hosted Hill, Carlyle and Sen. Curtis King (R-Yakima) and others in a half-day summit that prepared attendees and other supporters for the 2015 Washington state legislative session. The Bellevue event, which drew 400 people, was the second day of a two-day summit on legislative issues. The first day was held in Kennewick on Tuesday.

Other speakers at the Bellevue event included former Attorney General Rob McKenna, former New York Gov. George Pataki, Forbes columnist and former health care policy advisor to Mitt Romney Avik Roy and a small business panel that included former Starbucks president Howard Behar and restaurateur Taylor Hoang, who owns Pho Cyclo restaurants.

Sen. Curtis King (R-Yakima) speaks at the Washington Policy Center's Solutions Summit in Bellevue on Wednesday.

In a transportation forum, King, the Senate transportation chairman, declined to discuss in detail why lawmakers failed to come up with a transportation package that would pay for major road projects in the last session, but said that going forward, the state needs to consider what projects would make the greatest economic impact to the state as a whole.

“We got to take this limited amount of money and use it to address our problems,” he said. “Bike and ped paths are not our problem… They are nice to have, but not our problem.”

King, who was in the panel with Marc Scribner, a research fellow at the Competitive Enterprise Institute, also criticized cities that make local decisions without considering how transportation will be affected, such as in Seattle, where several projects in the South Lake Union area will bring 44,000 people to the area to live and work and bringing further congestion to the area, he said.

“Because Seattle said, ‘Hey, we’ll let you build those towers,’ is that the state’s problem?” King asked.

Governor Inslee proposes capital gains tax to fill budget gap

By | December 18, 2014 | 0 Comments


Gov. Jay Inslee says it’s time to “buck up” and invest in the state of Washington. He’s recommending a new capital gains tax to help close a $2 billion dollar gap in the next two-year budget.

“It is time to reinvest in our state and this budget does that,” Gov. Inslee said.

The Governor released his 2015-17 budget proposal Thursday. The $39 billion plan is a combination of cuts to current programs and new revenue. The focus is on four key areas: stronger schools, healthier kids, cleaner air, and a fairer tax system.

“There is one simple fact: we cannot balance this budget and educate our children on cuts alone.”

In addition to the charge on carbon polluters unveiled earlier in the week, Gov. Inslee proposes a seven percent capital gains tax on money made from the sale of stocks and bonds above $25,000 for individuals and $50,000 for joint filers. It would begin in 2016 and is estimated to raise $800 million dollars in the first biennium.

“This is a tax on fewer than one percent of Washingtonians,” the Governor explained.  “For those folks who have retirement accounts, stock in those accounts when they sell that stock, there will be zero capital gains on that.”

The Governor says Washington’s capital gains tax would be less than similar taxes in Idaho, Oregon and California.  Also exempt is money earned from the sale of homes, farms, and forestry.

“This is not intended to show any lack of respect for those who would pay under this proposal. We honor success in Washington. In fact, we treasure it, but we always have to push for fairness.” The Governor later explained why he believes a capital gains tax is a better option over a sales tax increase. “It would be unfair to working families in this tough economy, where you have such incredible income inequality, to put more tax burden on working families. I believe, in this circumstance where we’ve had such wealth creation in this state… That giving a beginning teacher, or a person who’s making $500,000 selling stocks and bonds, at this point we outta ask that wealthier person to step up to the plate.”

Among the other ideas on the list of new revenues, Gov. Inslee wants five tax breaks repealed, the state cigarette tax increased by 50 cents a pack, a new tax on e-cigarettes and vapor products, and a tax on bottled water.

Those new revenues add up to $1.4 billion dollars.

Given the size of the budget shortfall and the State Supreme Court mandate on McCleary, the Governor says statewide cuts are also needed. His budget proposal includes $211 million in General Fund spending cuts. Another $212 million was found by shifting General Fund costs to other fund sources and maximizing federal funds.

“The fact of the matter is we have made reductions of $12 billion dollars since the recession started. We have already slashed mental health way past the bone. We’re in the arteries.”  Governor Inslee said as a result the courts have held the state in contempt. “The point is this recession has put us $1 billion dollars in the hole, and we have slashed to the bone and now we’re looking into the cartilage to the tune of about $400 million dollars.”

The largest chunk of Gov. Inslee’s budget is dedicated to schools. He wants to spend $18.2 billion in order to meet McCleary. That would include money for smaller K-3 classes and full-day kindergarten for all students across the state.

Social and Health Services would get $6.4 billion. Washington colleges and universities would be allocated $3.4 billion, but in-state undergraduate tuition would be frozen.

When asked whether he changed his tune from the 2012 campaign when then-candidate Inslee vowed not to raise taxes: “The combination of the legislature not closing these loopholes… and increasing demands in education and mental health, we simply have not been able to generate the revenues necessary to provide vital services to Washingtonians. I have hoped to avoid this route. I have tried to avoid this route, but we now have an obligation to our children. They oughta have a first class education. It is a duty of ours and I intend to fulfill it.”

Immediately following the Governor’s news conference, the Senate Republican’s chief budget writer issued a statement. Sen. Andy Hill (R – Redmond) said, “Investing in student achievement and providing essential services should not depend on risky tax schemes that threaten our economy. Educating our children, caring for those in need and supporting our local economy demands thoughtful, bipartisan budget leadership. Tax increases should be the last resort, not the first response.”

You can see more of the details of the Governor’s 2015-17 budget proposal here.

You can also hear more from Governor Inslee’s budget director, David Schumacher.  He is the  guest on this week’s “Inside Olympia.”

Governor Jay Inslee to Release Entire Budget Proposal Thursday

By | December 17, 2014 | 0 Comments

Governor Jay Inslee will release the entirety of his proposed 2015–17 biennial budget on Thursday at 10:30 a.m.

TVW will carry the event live, both on TV and on our website.

Here’s the link to watch it live from your computer.