As the legislative session draws to a close, state lawmakers are pushing to complete their most vital task before the Sunday night deadline: passing an operating budget.
Majority Democrats in both the House and the Senate put forth robust proposals late last month, with anticipated spending over the 2021-23 biennium just shy of $60 billion. They’re still working to merge the two plans and are expecting that their reconciled budget will be ready for a vote by today.
Republican leaders from Southwest Washington expressed frustration with how the process was unfolding this week.
“Why the delay?” asked Sen. Lynda Wilson, R-Vancouver, who serves as the Senate GOP budget leader.
“If we don’t see a budget until Saturday, with the session ending Sunday, that means 24 to 36 hours maximum to look at a spending plan which could top $60 billion. That utter lack of transparency is unacceptable – not just to us, but to the families and employers who must pay for it all.”
Sen. John Braun, R-Centralia, complained Friday that the minority party wasn’t granted any sort of significant input on the reconciliation process.
“You will see (the final budget) when I see it,” Braun said. “I don’t think it’s going to be a budget that we like.”
The proposed budgets are sizable, as the state finds itself collecting stronger-than-expected tax revenue and about $7 billion in federal COVID-19 relief. Democrat lawmakers say that they’re taking the opportunity to right the state’s regressive tax structure.
Capital gains tax
Their plan includes a capital gains tax, which also needs to make it through the Legislature before the Sunday deadline. If passed, the tax would bring in around $550 million per year starting in 2023 by collecting a 7 percent tax on the revenue from sale of certain assets – including stocks and bonds – of more than $250,000.
Proponents, including primary bill sponsor and Democratic Rep. Noel Frame, say the capital gains tax is an important step toward redirecting some of the state’s financial burden onto the residents who can best afford it.
Braun, who serves as Republican Senate leader, said that the capital gains tax bill likely has the votes in the Senate to pass despite uniform Republican opposition. However, the most likely sticking point is newly added language in the bill that would block a future ballot referendum on the tax, he added.
“That’s the only thing stopping it at this point,” Braun said.
Sen. Ann Rivers, the Republican caucus chair from La Center, said that the capital gains tax is one of a slate of various revenue-boosting bills still under consideration. Few are on track to pass by Sunday – some, like the low-carbon fuel standard, have made it through both chambers of the Legislature.
“The most progressive thing you can do is not increase taxes on the poor. In that regard, this session has been very, very disappointing,” Rivers said Friday. “There’s a myriad of other taxes that will be so devastating for our middle class.”
Republicans unveiled their budget proposals in February – the Senate and House GOP plans would each spend just over $55 billion over the next two years.
There’s bipartisan agreement on a few points. Both Republicans and Democrats are proponents of the Working Families Tax Credit, a program that was established in 2008 but never funded nor implemented. The program will issue tax refunds to low-income people and families – up to $300 for single people, and $1,200 for families – in an attempt to offset money they spend on the state’s sales tax. The credit would return an estimated $250 million per year to low-income taxpayers.
“It’s been on the books for over a decade without funding. We highlighted that in our Republican budget that we offered a couple months ago,” Rivers said.
