Update from Olympia – May 6, 2015

Greetings Friends and Neighbors,

The Legislature adjourned the 2015 regular session on Friday, April 24, two days before completing the 105 days for which it was scheduled. Because House Democrats continue to delay negotiation on a complete budget, we have now entered a 30-day special session. However, it is imperative that we pass a complete budget by May 15 to allow for school districts to plan for the coming school year.

The Senate has accomplished a great deal, passing significant legislation that protects family budgets, prioritizes state spending on education and does not raise taxes. The House budget proposal requires a $1.5 billion tax increase, however the House has yet to vote on any revenue bills.

I will continue to keep you updated on events from the capitol throughout the special session.

Capital gains tax is no sustainable budget solution

A recent poll in the Columbia Basin Herald indicated that nearly 60 percent of participants favored a capital gains tax to fund public education. The governor and House Democrats have been vocal in their calls for a sustainable revenue source to fund education.They have proposed solutions ranging from a carbon tax to a capital gains tax. Both are bad for our state’s recovering economy, for families and for education. I want to discuss why a capital gains tax is not a sustainable solution.

State budgets are already volatile and relying on a capital gains tax increases that volatility. There are examples across the country of states that implemented a capital gains tax now scrambling to cover losses in projected revenue. The chart above shows the historical data of a proposed capital gains tax versus the current sales tax. You can see the significant changes year-to-year. Trying to prioritize state spending in an environment where you could have a 54 percent decrease in taxes would be devastating.

A report by Massachusetts notes, “Capital gains are the state’s most volatile tax revenue source,” and ” Based on tax year 2000 rates, these tax revenues declined $829 million – or 71 percent – from 2000 to 2002.  They are expected to decline by about $1.3 billion from fiscal year 2008 to fiscal year 2010.” This volatility means that the states must be extra vigilant in saving from budget-to-budget to deal with the changes. Given the record of how business is done in Olympia, I don’t trust that this necessary savings would occur.

You can read the rest of that report here.

The governor’s budget proposal is a good example of the lack of saving mentality in Olympia. With $3 billion in increased projected revenue coming to Washington, his budget cleans out the state’s constitutional rainy day fund to cover significant increased spending. If some in our state cannot wisely use the resources we already have, how would a capital gains proposal be any different?

It is important to keep in mind that at this point these various tax proposals have not even been subject to a vote by the chamber proposing them. The Senate passed a no new taxes budget that balances without raising taxes. Sustainable education funding comes from making education a priority. The Majority Coalition is working to reverse 30 years of putting general government spending ahead of education.

Senate delivers on major issues facing our state

The Senate’s accomplishments in addition to its no new taxes operating budget and bipartisan capital budget, include:

Full funding of K-12 education – 47 percent of the Senate budget is dedicated to basic education. As a percentage of the budget, it hasn’t been that high since Gov. John Spellman was in office (1981-85). The Senate budget adds $1.3 billion for K-12 schools, addressing the 2012 McCleary court decision and providing teacher cost-of-living pay raises.

First tuition reduction in over 40 years – The Senate budget, coupled with its College Affordability Program legislation (Senate Bill 5954), would cut college tuition at four-year institutions by an average of 25 percent, helping 200,000 students and saving families over $300 million through lower college costs.

A capital budget that builds 2,100 classrooms – This complements the Senate operating-budget priority on lowering class sizes for K-3 grades (the House capital budget does not).

Tougher drunken-driving law – 4th DUI in 10 years is now charged as a felony, meaning state prison instead of county jail.

Energy and carbon reduction plan – The Senate led the way on clean energy with passage of Senate Bill 5735, a practical carbon-reduction plan. This measure does not require the large and damaging tax increases favored by the governor. No action was taken in the House.

Oil-train safety – Senate Bill 5057 provides equipment and advance notification to emergency agencies.

Reconciled medical marijuana system with recreational market – Senate Bill 5052 will protect patients and add safeguards for kids.

Telemedicine – Senate Bill 5175 expands use of interactive technology to give rural areas more access to health care.

Mental health – Senate Bill 5269, known as ‘Joel’s Law’ to give families more options to protect loved ones dealing with mental illness.

Senior-citizen property-tax exemption – Senate Bill 5186 helps 100,000 low-income seniors stay in their homes.

Government accountability — The most ambitious state-government quality-assurance agenda in the nation passed with bipartisan support. SB 5737 gives state government the accountability tools it needs to improve quality and measure savings.

Thank you

I want to thank everyone who has reached out with cards and well wishes during my time of personal loss. I missed a number of votes in the Senate but sometimes life happens even during a legislative session and I needed to be with my mother and family in her final days. Thank you for your support and understanding.

It is an honor to serve as your state Senator.

Judy Warnick,

13th District Senator

Contact Me

Olympia Office:

103 Irv Newhouse Bldg.

P.O. Box 40410

Olympia, WA 98504

Olympia Phone:

360.786.7624

District Phone:

509.766.6505

E-mail:

Judith.Warnick@leg.wa.gov

Website:

Click here to visit my website.