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Wednesday, April 5, 2017

Olympia House Democrats’ proposed operating budget – large increase in spending and taxes

Cary Condotta
There is less than three weeks left in the legislative session and the proposed operating budgets have been unveiled by Senate Republicans and House Democrats. The Senate Republican operating budget prioritizes and invests heavily in K-12 education. The plan would continue an upward trend of investments in K-12 education since Republicans have been in the majority in the Senate. Under this budget proposal 50 percent of the operating budget would be dedicated to education — the highest percentage since 1983.
The House Democrats’ operating budget proposal is spend and tax, and spend and tax some more. Click here to watch my video as I breakdown the numbers. Numbers you should know:
  • 17 percent increase in spending for the next budget cycle;
  • 15 percent increase in spending for the following cycle, 2019-21;
  • $3 billion in proposed tax increases for the next biennium, $8 billion over four years; and
  • $12 million left over in the ending fund balance for the four-year outlook.
State revenues are at historic levels, yet they want to raise taxes in a number of areas — including a capital gains income tax, modifying our state’s already onerous B&O tax (you can find a list of winners and losers here), a change to the real estate excise tax, and closing some tax exemptions. Businesses in Washington already pay more than their fair share under our B&O tax system.
In an effort to satisfy the courts’ McCleary order, both proposed budgets increase education spending substantially. The two budgets are only about $83 million apart. Only $83 million – yet Democrats propose raising taxes $3 billion and increase spending by more than $6.5 billion in the next biennium. Senate Republicans use existing revenues.
I would add the House Democrats’ proposal does not offer fundamental reforms to the way funds are spent in the schools, as required by McCleary. The Senate Republican proposal offers reforms including the replacement of inequitable and discriminatory local levies by creating a new state “local effort levy.” I don’t know that the House proposal would pass constitutional muster because it leaves in place the very levy system the courts have criticized. 
Friday, House Democrats passed their operating budget proposal on a party-line vote 50-48.
Today, a public hearing was held on their tax bill – House Bill 2186. It is scheduled for a committee vote on Tuesday.
We will have to see if they have the votes to pass it out of committee AND bring it to the floor for a vote by the full House of Representatives. Stay tuned…
Fuel tax transparency
In an effort to let taxpayers know how much gas tax money they are truly paying at the pump I have introduced legislation that would require the Washington State Department of Agriculture to place a sticker on all fuel pumps letting people know how much they are currently paying in federal and state gas tax rates.
I am expecting some sticker shock with House Bill 2180. Think about it this way, if you pump 20 gallons of gas into your car, you are paying $13.56 in gas tax. Of course diesel fuel is more.
With taxation must come transparency. With transparency also comes accountability. Our government is held more accountable if the citizens of our state are more knowledgeable about the taxes they are paying.
Washington state’s current gas tax is 49.4 cents per gallon. It is the second highest gas tax in the country behind Pennsylvania. The federal gas tax rate is 18.4 cents per gallon, 22.4 cents per gallon for diesel fuel.

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