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April 19, 2017

Dear Friends and Neighbors,

Only days remain until the scheduled end of the 2017 regular session next Sunday, April 23. Although budget negotiators began meeting Monday, they have plenty of work ahead. Please read on for further details.

Competing operating budgets remain far apart

In my last report to you on March 23, I outlined the Senate Republican operating budget proposal. Senate Bill 5048 passed off the Senate floor March 23, on a 25-24 vote.

Senate Republican operating budget proposal

• It would appropriate $43 billion, an increase of about $5 billion (13 percent) over the current budget cycle.
• $1.3 billion of that increase is directed toward K-12 education to help satisfy McCleary court ruling requirements (fully funding education).
• It would implement statewide levy reform by replacing levies with a new flat tax assessment as a state portion of the property tax.
• It would leave the state's Rainy Day Fund intact with nearly $2 billion, and an ending fund reserve of about $138 million to deal with any unforeseen issues.

House Democrat operating budget proposal

On Monday, March 27, House Democrats released their state spending plan. House Bill 1067 reached the House floor March 30 in the form of a striking amendment to Senate Bill 5048. It was voted out on a 50-48 party-line vote.

Here are some notable items about the House Democrats' spending plan:

• It would appropriate $45 billion, an increase of about $6.5 billion over the current budget cycle.
• It would increase state spending by 34 percent for the 2019-21 budget cycle. In terms of dollars, that would boost spending from our current two-year operating budget of $38.2 billion up to more than $51.2 billion for the 2019-21 budget cycle. It would also mean our operating budget would increase by $20 billion over an eight-year period.
• This budget would also increase K-12 education funding by about $1.3 billion.
• It would rely on as much as $8 billion in new and additional taxes over four years, including: a 20 percent increase on business and occupation taxes for service, retail, wholesale and manufacturing; an increase in the real estate excise tax; a 7 percent capital gains income tax; imposing a sales tax on bottled water, and; repealing the non-resident sales tax exemption.
• It would spend down the state's Rainy Day Fund to $1.6 billion and leave only $12 million in ending fund reserves for any unforeseen issues.

House Democrats insist on tax increases they won't pass

As you can see, there are major differences in both budgets, most notably, the tax increase proposals and the enormous spending in the House Democrats' budget plan.

Here's why we are heading into a special session:

The House Democrats' spending plan is built on $8 billion of new and additional taxes. The problem is they will not bring their tax bills to the floor for a vote. It's most likely House Democrats do not have enough votes within their own caucus to pass their tax increases. The House Democrat plan relies on “phantom money” — revenue that does not yet exist. They have a budget plan, but no way to pay for it.

Senate Republicans say until Democrats pass the tax bills, there is not a firm figure upon which to negotiate. How do you negotiate a “wish list” that does not have the money to pay for it? So there have been no negotiations or meetings until earlier this week to come up with a compromise operating budget plan. While I remain optimistic until the end of the week, obviously the clock is ticking and the more time that passes pushes us closer to the necessity of having a special session.

Separate negotiations have continued on a McCleary education solution, which has been a bit more positive. Reps. Paul Harris and David Taylor, who represent us on the education funding task force, are working hard to bring people and ideas together.

Transportation budget – Some good things, but some concerns

We passed the transportation budget out of the House last Wednesday, April 5. It was the last bill of the day and carried us past 11 p.m. Our transportation lead, Rep. Ed Orcutt, sent out this news release. He explained why many of our members voted for the legislation, but also why we still have some concerns as the final plan is negotiated.

We tried to improve the transportation budget by offering 32 amendments, including solutions to lower Sound Transit 3 car tabs, eliminate I-405 toll lanes, hold Seattle accountable for Bertha cost overruns, and eliminate funding for a vehicle miles traveled pilot program. Only seven of our amendments were accepted. You can watch our House Republican floor speeches here.

Capital budget would fund local projects

The House also passed a $4.1 billion capital budget last Wednesday on a strong 96-2 vote. Often referred to as the “bricks and mortar” budget, this two-year plan focuses on education, mental health care and targeted projects in communities across our state. The proposal would include about $23 million for local projects, including parks, campground renovations, a food bank building, public safety centers and flood protection.

The trees tell us it's time to finish business and come home

On the southeast entrance to the Legislative Building is a Saucer Magnolia tree, known to longtime lawmakers as the “Sine Die Tree.” It was given this name during the 1960s by Jack Pyle, long-time correspondent for the Tacoma News Tribune. Pyle noted when the tree blooms, it is nature's way of signaling the time for legislators to finish their business and go home.

The tree is now in full bloom. Budget negotiators likely won't pay attention to the tree, but they should pay attention to citizens who understand that special sessions are costly and rarely change people's minds when it comes to a budget vote. Even if we must go into overtime, it's my hope we can finish negotiations and pass a compromise two-year operating budget before the Sine Die tree completely loses its petals.

Please also remember I work for you throughout the year. I maintain an office in Olympia. Please call me if you have questions, comments or concerns about legislation or need help navigating through a state government agency. My contact information is below.

Thank you for the honor of allowing me to serve and represent you!

In your service,

Dan Kristiansen