No one in Olympia really believed that the State Legislature would adjourn by its April 26 target.
The initial response from Senate Republicans to the $38.8 billion, 2015-2017 budget unveiled by House Democrats on Friday makes it pretty clear that this session is likely headed for overtime. (The Senate Republicans budget — $37 billion with no new taxes — is expected in a few days.)
The House Democrats' budget proposal includes a 5 percent capital gains tax on Washington's wealthiest 32,000 residents. It would also raise the business-and-occupation tax rate for service businesses from 1.5 percent to 1.8 percent. And it would eliminate seven tax breaks, including those on non-residential sales taxes and on bottled water.
The Democratic proposal puts $1.4 billion towards satisfying the 2012 Washington Supreme Court mandate to radically reduce teacher-student ratios in Grades K-3. Sen. Andy Hill (at left), a Republican from Redmond and the Senate's chief budget writer, mentioned a $750 million figure in response to the Democrats $1.4 billion allocation, and he didn't indicate whether the GOP plans to go higher. The Legislature could face Supreme Court sanctions if it does not come up with a plan to adequately meet all the obligations of the Court's ruling by the 2018-2019 fiscal year. An appropriation of $750 million — if that is the GOP's final offer — would push the Legislature further behind on those obligations.
Absent from the Dems budget proposal is a proposed carbon emissions tax on polluters. Budget co-writer Rep. Reuven Carlyle (below), D-Seattle, said that concept still needs work, but that it will likely show up again in the future.
Also missing, a proposed 50-cent-per-pack cigarette tax increase and a proposed tax on electronic cigarettes. Carlyle explained that these taxes won't be pursued for budget balancing, though they too might pop up again for other purposes.
The Democratic package includes cost-of-living pay raises for teachers and a $583 million negotiated pay raise package for state employees. Hill said the GOP proposal has a cost-of-living raise for teachers as well, but declined to comment on any pay raise for state employees.
House Majority Leader Pat Sullivan, D-Covington says, "we have the votes for the revenue package." But Hill said a capital gains tax and an increased B&O tax on service businesses is unacceptable to the Senate Majority Coalition Caucus of 25 Republicans and one Democrat, arguing that a capital gains tax would drive the state's wealthiest citizens out of Washington, Hill called the B&O tax hike a 20 percent tax increase for service businesses.
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Hill also criticized Democrats for using tax hikes to fund education, saying that education should be paid for with existing money and that Democrats should find new money to fund other programs. The Republicans' position on the budget process is that since the state has $3 billion more dollars coming in for 2015-2017 than it did for 2013-2015, then all the state's obligations, including those imposed by Supreme Court vis a vis education, can be met with a $37 billion budget — and no new taxes.
Look for a more detailed analysis of the Democrat's budget proposal this weekend.
