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Dear Friends and Neighbors,
As we move to the final two weeks of the legislative session, no doubt the topic here in Olympia and around your kitchen table is about the state budget and how it will impact you, your family, friends and neighbors. The proposed state operating budget, House Bill 1087, passed the House on Saturday, April 9. I hope this brief update is helpful and I hope you have an opportunity to weigh in on the budget proposal as it heads to the Senate for consideration.
An update on the state budget
There is some good news: State tax collections are up an estimated $3.85 billion, or nearly 14 percent! This would bring our overall tax revenue for the 2011-13 budget to more than $32 billion.
The budget proposal that passed the House would spend a record high $32.4 billion. Many of you likely saw the budget protests at the Capitol last week on the news. What you may not have heard is that the budget passed on Saturday spends $2 billion more than the 2009-11 budget. There were some things in the budget that I liked, but the cuts to education, public safety and employment programs for the developmentally disabled, to mention a few items, while adding $600 million in new programs and spending $2 billion more, were unacceptable to me.
The majority party's budget also used gimmicks, such as one-time fund transfers to pay for ongoing programs, gambles on a $300 million lump-sum payment to lease our state's liquor distribution system, increases fees by $553 million (including higher education tuition) and leaves nothing in rainy day account. When I think about the families in our district, I don't think they have more money to spend in their budgets and cannot count on any budget tricks to make a mortgage payment or put food on the table. Simply put, the budget passed Saturday is neither sustainable or transparent to taxpayers, so I could not support it.
House Republicans offered an alternative plan, which wasn't perfect either, but I liked that it preserved millions more in funding for K-12 education and the school lunch program, public safety and the developmentally disabled employment program. It also left nearly $800 million in the state's rainy day fund. Here are a few of the budget principles House Republicans used to craft the alternative spending plan:
- Must be sustainable;
- No gimmicks (use of one-time money for ongoing projects or fund transfers, etc.);
- Reflect the priorities of government;
- Seek efficiencies and reforms where cost effective; and
- No new taxes.
My video update this week also focuses on the budget. You can watch it here. There is still time to offer feedback on the budget because it will now be considered in the Senate.
Getting rid of tax incentives to increase spending
Despite billions in increased spending, the dialogue is that we still have a $5.1 billion shortfall. To fill this spending gap, special interest groups have called on the Legislature to “close tax loopholes” and spend even more than the additional 14 percent in revenue. I have heard that not taxing elective plastic surgery is a “loophole.” But, we don't tax any service, so if we eliminate this tax incentive, we would have to tax every service business in the state to ensure tax fairness.
Job-creating tax incentives go through a rigorous process of public hearings, votes in the House and Senate and must get be signed by the governor to be enacted. These incentives are in place to help employers, employees and hard-working families. There are great examples of successful job-creating tax incentives, such as those for high-tech data centers in Moses Lake and Alcoa's plant in Wenatchee, which have created hundreds of family-wage jobs.
Those demanding removal of tax incentives haven't told the public one of their proposals, Senate Bill 5857, would remove the tax preference for food. This would result in a $1.7 billion tax increase on Washington families. I will not support taxing food when many families are struggling.
Ironically, additional tax incentives for movie makers, baseball stadiums, property tax relief for tribes and zoos, and a couple dozen more “loopholes” have been proposed this year by the very interest groups advocating for closing them. Why create more if they are the problem?
Update on Innovation Schools legislation
I am pleased to tell you that my Innovations Schools measure, House Bill 1546, passed the Senate with an amendment. While I am not completely happy with how some of the amendments have narrowed the bill, I am happy it has continued to make it through the weeding-out process, which most bills do not survive. Now, it must come back to the House so we can vote to support the Senate's changes. Then, it will head to the governor for her signature.
This bill is a step in the right direction to allow teachers and pa
rents, those closest to the students in our schools and communities, to be creative and design schools that fit the needs of their student populations.
You can read more about this bill here.
I hope this e-mail is informative. Please feel free to contact my office with questions or concerns.
Thank you for allowing me to serve you.
Sincerely,
Mark Hargrove
