Letter from Olympia, week 15

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Dear neighbor,

The regular session of the Legislature will adjourn sometime this evening. But we are far from finished with our work. The Legislature will go into special session in May because of substantial differences between the House and Senate on the operating budget. We also need to pass a capital budget and consider transportation funding for projects like the completion of Highway 167.

To help fund their operating budget proposal the House majority is relying on about $900 million in tax increases. On Wednesday, the tax increase measure, House Bill 2038, came to the floor for debate. Despite vigorous opposition by House Republicans in the two-hour debate, the bill passed the House by a vote of 50-47, with all Republicans and five Democrats voting against it.

Republicans offered two amendments that would have deleted the emergency clause in the bill allowing the tax package to go before voters in the November election. An emergency clause would allow the bill to take effect immediately upon the governor’s signature. Unfortunately, it also would prevent voters from petitioning to put a referendum on the ballot. The voters in our state have made it abundantly clear that they wish to vote on new or increased taxes. The voters will not have the opportunity to take this to a referendum and vote on this measure if it becomes law because the majority rejected our amendments.

Here is a list of the tax increases passed by majority Democrats in House Bill 2038:

Tax increases

$534 million – Would permanently extend the business and occupation (B&O) surtax on certain businesses.
$14.6 million – B&O tax rates for travel agents.
$51.5 million – Would place sales and use tax on bottled water. This is the same tax that was repealed by voters in 2010.
$43 million – Would repeal the nonresident sales and use tax exemption. This could especially hit our border counties very hard along Oregon and the British Columbia borders.
$78.7 million - B&O taxes for high-tech research and development.
$63.2 million – Public utility tax on truck transport of goods in state that are destined for out of state.
$24.1 million – B&O and sales and use taxes for import commerce.
$29 million – B&O tax for sellers of prescription drugs.
$40.8 million – Fuel tax for extracted fuel.
$5.2 million – Handling losses fuel tax.

TOTAL: $879 million

I am hopeful that most, if not all, of these taxes will die in the Senate.

Telephone Town Hall

I am hosting a telephone town hall next Tuesday, April 30. I hope will be able to join me. We should have more information about the special session, budget negotiations, transportation funding and much more by then. The event begins at 6:30 p.m. and will last one hour. You can join by calling toll-free 1-800-757-3703. You can listen in, ask questions, and answer poll questions.

If you have any questions or comments before the event, please contact my Olympia office at (360) 786-7968 or hans.zeiger@leg.wa.gov.

Sincerely,