More on House-adopted budget: WRC reports on spending adjustment; Lens looks at “uncertain future” of tax legislation

With budget discussions in difficult straits, what’s left is analysis of the latest public activity. The Washington Research Council is out with a new analysis of the spending plan adopted by the House. 

Floor amendments added $250,000 in near general fund–state plus opportunity pathways (NGFS+) spending, on top of amendments made in committee. Altogether, the House-passed budget would increase NGFS+ spending by $6.438 billion over 2015–17. Of that, policy changes total $3.252 billion. According to an updated outlook, the proposal would leave an unrestricted ending fund balance of $13 million in 2017–19.

The WRC analysis includes a bar chart comparing the House and Senate spending plans.

“Spending plans” continues to be the right terminology, at least with respect to the House budget, as the House has yet to vote on a funding package. Although the House Finance Committee voted out revenue legislation yesterday, the Lens reports we may not want to read too much into that.

HB 2186 received a “do pass” recommendation from the House Finance Committee Tuesday, April 4 after a public hearing the day prior. House Democrats on the committee praised the bill as a needed revamp of the state’s taxing system that would provide relief to small businesses. However, Republican lawmakers and business leaders testifying during the April 3 public hearing opposed the bill, saying it could cause economic harm to communities and industries reliant on certain tax incentives that would be eliminated under the legislation. Senate Republicans also questioned whether the tax package can obtain the necessary House votes to clear that chamber….

Even supporters of the bill suggested the measure was a bargaining chip.

State Rep. Larry Springer (D-45) urged colleagues April 4 to recommend the bill, although “there is much in here I like and much in here I don’t like.”

“We have a budget to negotiate now,” he said. “This is the point at which we begin the real discussion here. Stay tuned, it’s a work in progress.”

The Lens includes discussion of business opposition to the tax increases, including the lingering questions about the proposed capital gains tax.

Although Lytton has referred to the capital gains tax as an excise tax, Committee Counsel Tracey O’Brien told lawmakers that capital gains is reported as income in the federal tax code.

“It’s unclear whether the court would consider capital gains as income,” she said.

However, Senate Majority Leader Sen. Mark Schoesler (R-9) told reporters at an April 3 press conference that “You can call it (capital gains tax) what you want, but it still quacks like a duck.”

“You have to file an income return to test how much gain you have,” he said. “It’s always been lumped together in federal tax code as an income.”

It’s a point also made by Jared Walczak‏, a policy analyst for the Tax Foundation.

And, of course, without the funding, the House spending plan doesn’t work.