The Legislature beat the clock, barely. Adopting a $52.4 billion state budget and $830+ million in new taxes at midnight Sunday morning. We’ll have more detail on the tax and spending plans later. Below is a brief roundup of press coverage.
Update: We’re still trying to reconcile the numbers and look for more detail in the next few days. The $830+ referenced above refers to taxes to support the operating budget and the new dedicated higher education account. It does not include the $165 million raised in HB 5993. The Lens describes the tax increase this way.
After extensive debate on April 25, the Washington Senate voted 27-22 to increase the Hazardous Substance Tax that currently funds the Model Toxic Control Act (MTCA) accountsand then divert that money to new accounts, including the Public Works Assistance Account that provides loans for local infrastructure projects.
SB 5993 sponsored by Sen. David Frockt (D-46) shifts the substance tax from a $.07 wholesale value rate on “hazardous substances” to a volumetric rate of $1.09 per barrel. The bill originally called for a $2.52 per barrel tax.
The $52.4 billion budget passed the House on a 57-41 vote shortly after clearing the Senate on a 27-21 vote. The rapid votes, just before a midnight deadline, came after it appeared lawmakers would go into overtime to resolve an impasse on a bill to lift limits on voter-approved local taxes for schools, known as the “levy lid.” School officials had warned that teacher and staff layoffs would occur if legislative action wasn’t taken…
More than $800 million in new revenue was passed by the Legislature ahead of passage of the underlying budget, including an increase in business and occupation taxes on large banks and a change to the state’s real estate excise tax.
At Crosscut, Melissa Santos reports,
Both the House and Senate — each with healthy Democratic majorities — floated versions of a capital-gains tax this year. But the tax, which opponents have decried as an unconstitutional tax on income, failed to make it into the final budget deal…
All told, legislators approved more than $830 million in increased taxes over two years, though only a little more than half of that will go toward supporting the operating budget. The remaining $376 million will come from increasing taxes on big tech companies — including Amazon and Microsoft — and some service businesses, which will pay for higher education and workforce programs.
About $244 million of the new revenue going toward the operating budget comes from a graduated real-estate excise tax, which raises taxes on sales of real estate priced at $1.5 million or above. The increased tax rate applies only to the portion of the selling price above $1.5 million; meanwhile, people selling homes priced at $500,000 or under would get a tax cut. An even higher tax rate will apply to sales of homes priced above $3 million.
Another $133.2 million comes from increasing taxes on large banks.
Other new revenue comes from taxing vapor products, as well as narrowing the sales tax exemption for out-of-state shoppers, such as people from Oregon who come to shop in Washington. Travel agents and tour operators also will be taxed at a higher rate under the plan.
Joseph O’Sullivan reports on the tax package in the Seattle Times and provides an initial session wrap-up, including a focus on how Gov. Inslee’s priorities fared (the governor believes he and the Legislature did very well).
O’Sullivan reports on Republican concerns with the budget running up to the vote.
The budget would boost state spending too quickly at a time when a new recession could appear on the horizon, Sen. John Braun, R-Centralia, said.
Braun invoked the Great Recession, after which state lawmakers had to slash budgets — and important government programs — to cope with dwindling tax revenues.
“We know the economy will turn eventually,” said Braun, ranking Republican on the Senate Ways and Means Committee. “And I don’t think there’s anything more painful than taking a service away from someone …”
The push to meet the April 28 deadline required a lot of late night activity, which led many open government advocates concerned about transparency. The Northwest News Network writes,
Passage of the budget capped a weekend of marathon floor sessions and last-minute votes as the clock ran out on the 105-day regular session. It was the first on-time adjournment of an odd-year, budget-writing session in a decade.
Minority Republicans and open government advocates decried what they said was a lack of openness and transparency — “vampire” votes in the words of one — as Democrats fast-tracked tax bills and held overnight votes. But Democratic leaders said the pace was necessary to finish on time. In addition to taking tax votes in the early morning hours, when most people were sleeping, the House galleries were closed to the public on Friday and Saturday due to unspecified safety concerns.