Dear Friends and Neighbors,
We are only a couple weeks away from scheduled adjournment of the 60-day session on March 8. Soon, we will be taking final votes on bills that could affect your job, your business, your family and more. Silence is consent in Olympia. Now is the time we need to hear from you!
Join us for a telephone town hall!
I would like to invite you to join me, Rep. Carolyn Eslick and Sen. Keith Wagoner tonight for a telephone town hall beginning at 6 p.m. The community conversation, which is similar to a call-in radio format, will last an hour. We will take questions and provide an update on the 2018 legislative session.
To participate, you can call (425) 616-0578 beginning at 6 p.m. Once connected, you can listen in and press * (star) on your telephone keypad to ask questions. This is your opportunity to make your voice heard and let us know how you feel about the issues before us during the remaining days of the session.
State flush with money, but Democrats push for carbon tax, capital gains tax
Last Thursday, the Washington State Economic and Revenue Forecast Council released its quarterly revenue forecast. The General Fund-State (GF-S) revenue forecast has been increased by $647 million for the 2017-19 budget cycle and by $671 million for the 2019-21 budget cycle. That's an additional $1.3 billion in additional revenue.
This is good news for the state and a significant increase in our revenue picture. Yet, it still doesn't seem to be enough money to satisfy the spending desires of our Democratic counterparts.
Last week, Gov. Jay Inslee brought former U.S. Secretary of State John Kerry to Olympia to help him promote a carbon tax. The governor wants to tax carbon emissions by transportation fuels and power plants at $20 per metric ton (amended to $12 per metric ton by a Senate committee), beginning in July 2019. The tax would increase by 3.5 percent, plus inflation, each year after that. It is estimated to generate about $1.5 billion in new taxes per biennium. The governor's own staff says consumers could expect to pay an additional 18 – 20 cents per gallon of gasoline as a result of the carbon tax, plus an increase of 5 – 10 percent in electricity and natural gas prices.
Capital gains income tax
Despite the fact that Washingtonians have repeatedly rejected an income tax, Democrats continue pushing for it. Last fall, the city of Seattle tried to enact a citywide income tax, but a court later invalidated it as unconstitutional. On Monday, the House Finance Committee passed House Bill 2967 along party lines, 6-5, with Republicans voting no. The measure would impose a 7 percent tax on capital gains income.
It is cleverly written and tempting, because the bill promises to reduce property taxes and increase income thresholds for senior citizens, persons with disabilities and veterans, beginning in 2021. However, with more than $1.3 billion from the new revenue forecast, my Republican colleagues and I believe we could provide immediate property tax relief this year that would help against the 2018 tax spike that is a result of McCleary education funding passed by the Legislature last year.
An amendment to provide that immediate property tax relief without the capital gains income tax was rejected by committee Democrats.
House Bill 2967 also picks winners and losers. It would increase taxes on one set of citizens to pay for decreased taxes for another set of citizens. Let's also remember that once the Legislature imposes an income tax that begins at a higher income threshold, there's little to stop that threshold from being reduced until most citizens qualify to pay state taxes on their income.
The bottom line: The state is already flush with money. We don't need to increase taxes. Period!
It was only eight months ago the Legislature approved a two-year $43.7 billion state operating budget to carry us through June 30, 2019. This session is what we call a “supplemental budget year,” meaning the budgets we pass during this session should not be an entire re-write of the two-year budget adopted in June 2017.
A good rule of thumb for supplemental budgets was written in the 1990s by former Rep. Tom Huff who was the co-chair of the House Appropriations Committee. Huff wrote:
“A 1998 Supplemental Budget Request will be considered if:
- It is an unanticipated, unmanageable change in an entitlement program workload or caseload.
- It corrects a serious technical error in the original appropriation.
- It deals with an emergency.
- It addresses an opportunity that will not be available next biennium. “
This week, majority Democrats in the House and Senate released their budget proposals. While we are still sifting through the plans, initially it appears there are large spending increases in both that may go beyond the Huff elements. Rep. Bruce Chandler, ranking Republican on the House Appropriations Committee, issued a statement with concerns the plans increase state spending “at a rate much faster than statewide household incomes. This is shortsighted and unsustainable,” he added. You can read his statement here.
Watch my Legislative Video Update
Every two weeks during the legislative session, I record a video update with news and views from the Legislature. In my latest video, I discuss the house-of-origin floor cutoff, a heated debate about the marbled murrelet (which some think may be “Spotted Owl 2.0), and the carbon tax. Click here or on the photo below to watch my video.
I want to hear from you!
Again, please consider joining our 39th District telephone town hall tonight at 6 p.m. Information is at the top of this newsletter. You may also call, write or email my office. My contact information is below.
Thank you for allowing me the honor to serve and represent you!
In your service,