The reasons for lawmakers to come back to Olympia before January are mounting up. Let’s cite a few recent appeals for a special session.
The Seattle Times editorial board recognizes a serious warning in the state’s recent economic forecast (forecast here).
A new state forecast says Washington’s economic recovery from the pandemic will be slower than hoped. The state’s manufacturing and construction industries also face grave declines.
This should be a five-alarm fire for state leaders, including Gov. Jay Inslee and the Legislature.
Sustaining and growing industries, jobs and the opportunity they provide must be a top priority. The Legislature should convene in special session sooner than its regular start date in January.
As the editorial points out, there was already an urgent need for a special session.
A special session was needed this summer even before the worsening economic outlook, to reduce spending and blunt the effect of an $8.8 billion plunge in state revenues. Leadership in three of the four legislative caucuses were game with Senate Democrats balking. But Inslee, who is running for reelection and heavily supported by public-sector unions, has refused to make that call.
Of additional concern to the ed board,
Meanwhile, Democrats controlling the Legislature are preparing to push for substantial tax increases when they reconvene, including a proposal to impose a Seattle-style tax on jobs statewide.
Given the state’s new projection of job declines in core sectors, the benefits of any new taxes must be weighed against the negative effects they would have on sustaining and growing private-sector jobs.
Right. The editorial should be read in full; it makes a powerful case for taking steps to stem the employment decline.
…waiting until the regularly scheduled session to begin in January likely means more severe cuts and more drastic tax hikes because there will be fewer months to spread out the adjustments — and the blows.
All summer legislators, political pundits and newspaper editorial boards — including this one — urged the governor to let the third branch of government do its financial job.
The editorial goes so far as to argue for lawmakers calling themselves into session if the governor does not act, although it acknowledges neither event is likely.
We would be impressed if enough legislators bucked Inslee and called a special session on their own…
Unfortunately, it isn’t easy to pull off. The required number is 33 senators and 66 representatives to hit the 2/3 super-majority threshold to call a special session.
Again, we recommend reading the editorial. See also this piece in The Lens.
With unemployment levels not seen since the Great Depression, the state’s unemployment fund is quickly being spent.
“Since the beginning of March, the balance in that trust fund has dropped by about 50% — nearly $2.5 billion has flowed out of the fund to pay benefits,” said Bruce Beckett, government consultant to the Washington Retail Association. “And if that trajectory continues, clearly by the end of the year, beginning of next year, the fund will be depleted.”
The unemployment fund is entirely funded by Washington businesses, he explained. That’s why an increase in the unemployment insurance taxes paid by businesses are the likely candidate to refill the pot of money. According to the Employment Security Department’s forecast, these unemployment tax hikes could be steep for many Washington business owners.
“Where the vast majority of Washington’s employers sit in this array, it could be between a 400% and 600% increase next year,” Beckett said.
The article reviews some options for mitigating the challenge. We discussed several in yesterday’s post. Then there’s this:
Another way would be for the state to replenish the unemployment fund.
“Inject some of the federal CARES Act money into the system to ensure that unemployed workers continue to get their benefits — and to maybe avert the tax increase on employers at the very time that everyone’s hoping we can get people back to work,” Beckett said.
This could require action by the Legislature, which is why the Washington Retail Association is asking for a special session to be convened this fall.
“It’s very imperative that the special session convenes before the end of the year, because ESD has no choice but to increase the rate the way they see data is showing, and they send out the rate increase at the end of the year,” Gundersen said.
Again, we’ll see more discussion in the coming weeks. But time is passing quickly.