Category: Budget

House plans to move budget-related bills forward this week

OLYMPIA – The House is moving forward Wednesday with a short list of bills that will be necessary to implement (NTIB) the supplemental operating budget. Although an agreement on the final budget has not yet been reached, the House Democratic negotiating team wants to get the ball rolling.

“We have been negotiating in good faith practically every day of this special session,” said House Ways and Means Chair Ross Hunter (D-Medina). “We’ve taken significant steps toward the Republican position, and are still willing to discuss the final sticking points, but the time has come to act as well as talk.”

“We will also be placing a striking amendment to the budget on the bar Wednesday morning,” said House Majority Leader Pat Sullivan (D- Covington), “and we plan to take action on it later this week. The length of time it takes to pass a budget through both chambers means we have to begin moving things now.”

Continue reading “House plans to move budget-related bills forward this week”

SB 5539 – Film Credit bill

Update 3/9/12: The bill was “pulled” from Ways and Means last night and passed the House 92-6. The official term is that Ways and Means was “relieved of consideration” of the bill. I believe this particular subsidy is similar to the way the economics of the NBA works and voted no, but clearly a majority of legislators disagree with me.

I have received a lot of calls and e-mails from people about the Film Credit bill (SB 5539), as we do with any expiring tax credit or preference. The film industry is important to the state’s economy and to both the Spokane and Seattle areas in particular. We obviously want to do everything we can to encourage growth, however the structure of this particular credit has some issues.

The credit works as follows:

  • Companies get a 100% B&O tax credit for donations they make to a non-profit organization, reducing state tax revenues.
  • The non-profit in question can then subsidize film and commercial productions for up to 1/3 of the cost of production for their film or commercial.

In essence, taxpayers in Washington are paying out of state companies to do work in Washington. It’s one thing to give someone a reduced tax rate, but in this case it is a direct subsidy of commercial work. In deciding if a tax break is doing its job you have to look at what your alternatives are for spending the money. We could provide a much cheaper tax incentive to a wide variety of industries, or we could use the money to educate children (employing teachers, for example). In comparison to other incentives, this one is very, very expensive for the benefits received.

Continue reading “SB 5539 – Film Credit bill”

More on the Slow Motion Default in Wenatchee

In December we passed a bill out of Ways and Means, and then the House, but not the Senate that would have allowed Wenatchee to solve its own problems about financing their money-hemorrhaging arena, the Town Toyota Center. The region has continued to work on a mutually agreeable solution and a Senate bill embodying the proposal is up for consideration in Ways and Means Monday.

The contentious issue in the bill is the ability for the city of Wenatchee to impose a 0.2% sales tax with just a vote of the council, not a vote of the people. The current bill allows this, and everyone testifying on the issue stated that it was crucial to the success of the endeavor that they be able to do this.

Continue reading “More on the Slow Motion Default in Wenatchee”

Good Revenue and Caseload Forecasts Reduce Severity of Budget Problem

Actually, we “found” about $87 million in the revenue forecast update and about $330 million in projections of less usage of state services over the remainder of the biennium. In addition to this there has been less utilization of services in the “TANF box,” which is what we call the bundle of services we administer for the federal government that provide temporary aid to needy families.

This significantly reduces the level of severity of the budget cuts we will be making, but does not eliminate them. We expect to introduce the first draft of the House budget proposal this week. I expect significant changes over the remaining weeks of the session, but am hopeful (and on-schedule) to finish by March 8th, the official end of the session this year.

 

Educational Goals: penny-wise and pound-foolish decisions

The Ways and Means committee heard a number of contentious bills Saturday, including HB 2538, which is intended to save money for school districts by reducing requirements that the legislature has placed on them without funding. It was requested by the governor, and most of the savings came from lowering the frequency of audits when there has been no problems. I’m OK with this part.

The Education committee, which heard the bill first, amended it to eliminate the required state assessment of writing skills, and consequently the graduation requirement that students must have proficiency in writing. I am very uncomfortable with this decision, as were a number of other members of the committee during the hearing. We assess core graduation requirements because we believe that what is measured is taught. We should not carry this too far, and many skills are best assessed in the classroom, but we assess core requirements to ensure that students have the opportunity to learn them.

Continue reading “Educational Goals: penny-wise and pound-foolish decisions”

Landmark Supreme Court Case

The week before session the Washington Supreme Court decided the McCleary case unanimously in favor of the plaintiffs – two families and a number of school districts who claimed that the state had historically underfunded its primary duty to fund education. As those of you who have followed my writings over the years know, I agree with the plaintiffs and feel like the last decade of my work in the legislature has been justified.

CR Douglas of Fox News interviewed me on the issue. I’d include a nice embedded video here if I knew how to do it. Click here for the link to the KCPQ interview.

I also wrote a piece over the weekend before session while I was still angry about the headline in the Seattle Times about the decision. The text below is a little strident, but lays out my analysis of the issue: cutting basic education, and perhaps cutting ANY education is off the table this year.

Continue reading “Landmark Supreme Court Case”

Data on State Employee Compensation

I’ve answered a lot of mail in the past few weeks and one theme that threads through many of the emails is that the number of state employees is increasing rapidly, that they are paid way too much, and that their benefits are vastly greater than private sector workers. The conclusion is that we should be able to solve our entire budget problem with small adjustments in compensation.

Last year I supported a budget solution that would have required larger healthcare contributions from employees than we achieved in the final negotiations, but the general premise of this comclusion isn’t right. Let’s start with the numbers.

Continue reading “Data on State Employee Compensation”

Washington State and local taxes drop to lowest level in 50 years

The DOR released this as part of their “Revenue Update” for the month.

Washington’s state and local taxes (as a percent of personal income) dropped to their lowest level in 50 years in Fiscal Year 2009, according to new figures released by the U.S. Census Bureau.

Washington taxes dropped to $93.24 per $1,000 personal income from $105.49 in Fiscal Year 2008.  While many states experienced declines in taxes relative to personal income during that period, Washington’s decline was steep enough to change its national ranking to 35th highest among the states in 2009 from 30th highest in 2008. The national average for Fiscal Year 2009 was $102.10, down from $111.99 the prior year. The $93.24 figure, comprising $56.70 in state taxes and $36.54 in local taxes, is the lowest since the Department of Revenue began tracking this statistic in 1960, when the rate was the second lowest at $98.43. Taxes per capita also declined to $4,049 in 2009 from $4,354 in 2008, dropping Washington’s per capita ranking nationally to 21st lowest from 16th.  The national average in 2009 was $4,141.  More information on changes in rankings over the years and the factors involved is available in Comparative State and Local Taxes 2009, published online at http://dor.wa.gov/Content/AboutUs/StatisticsAndReports/2009/Compare09/default.aspx.

 

Post-Special Session Newsletter

Now that the “special” session is over I’ve been motivated to write a newsletter that answers many of the questions I’ve received in email. If you want to print it click here for the PDF version that’s better formatted for your printer (or at least for mine.)

As always, it’s an honor and a privilege to serve you in the Legislature. This will be my tenth year, which I find astounding. I never intended to do this – I thought I’d swoop in and fix school funding, then go back to the private sector. It turns out that some problems are harder to fix than you would think. The “great recession” is also making it a little more difficult…

Gov. Gregoire called the Legislature into special session Nov. 28 to deal with a significant decline in our expected revenue over the remainder of the two-year budget period, which ends June 30, 2013. She released her proposed revised budget Nov. 21.

We finished the special session on December 14th with the passage of a “down payment” bill on the budget, along with a handful of bills that were related to the budget or to creating jobs in Washington. The down payment bill saved a little less than 25% of the overall problem: $480 million. We still have about $1.5 billion to go.

Continue reading “Post-Special Session Newsletter”

Internet Sales Growth Explosive, Compared to In-Store Sales

The following article was sent to me by the Streamlined Sales and Use Tax Governing Board, an organization representing more than half the states that charge sales tax. In it you see the shift to Internet retailing and the consequent loss of sales tax revenue for the state. We are attempting to convince Congress that they should require Internet merchants to collect sales tax for states in which they do not have a physical presence, something the Supreme Court said was too difficult for them to do 15 years ago.

There are several bills in Congress right now do do this – a Democratic bill, a Republican bill, and a bi-partisan effort that seems to have legs. Yesterday the legislature in our Washington passed a “joint memorial” (SSJM 8009) to Congress urging them to take action on one of the bills. I personally prefer the bipartisan act.

This act by Congress could collect up to $170 million in sales tax that is legally owed but not being collected today, putting a substantial dent in our budget problem. This would not raise taxes, just do a better job of collecting them.

Our membership in the streamlined sales tax group and this bill is supported by the business community in Washington State, including the Association of Washington Business, Amazon.com, the Retail Federation, etc.

Continue reading “Internet Sales Growth Explosive, Compared to In-Store Sales”