WSAC/WACO Joint Conference Save the Date

The Senate House 2017-19 Operating Budget (HB 1067)

The House Democrats released a budget plan that increases taxes by approximately $3 billion to address the Supreme Court’s McCleary decision, behavioral and mental health issues, and other fiscal and policy issues. The budget assumes forecasted revenue increases for the general fund of $2.6 billion over the 2015-17 biennium. The plan makes 2017-19 general fund appropriations of $44.9 billion, for a net policy level change of $3.2 billion.

This includes:

  • $3.0 billion in additional resources from new revenue legislation.
  • $206 million in assumed reversions.
  • $96 million in budget driven revenue, other legislation, and other adjustments.

The proposal institutes a 7 percent tax on capital-gains earnings above $25,000 for single filers and $50,000 for joint filers affecting approximately 48,000 tax returns.  It also raises the state’s business-and-occupation tax rates 20 percent — but exempt businesses with less than $250,000 in annual gross revenue from paying the tax.  Additional revenue is achieved by rolling back a handful of tax exemptions, collecting a sales tax from purchases made over the internet and a restructuring of the state’s real estate excise tax. The budget proposal is linked to the revenue sources addressed in HB 2186, legislation that raises revenue from six sources:

  • Real Estate Excise Tax Reform: $419.7 million
  • Capital Gains: $715.0 million
  • Marketplace Fairness: Internet taxation for $340.8 million
  • Business & Occupation Tax: Impose 20% increase on service, retail, wholesale & manufacturing rates with a small business deduction of $250K/$100K (72% of businesses exempt from B&O tax) for $1.2 billion
  • Repeal Tax Preferences: $137.1 million
  •  Department of Revenue Administrative Options: $22.4 million
In addition to the revenue legislation, the budget proposal assumes passage of a number of policy bills necessary to implement the budget, including HB 1764, which replaces the 1% property tax cap, part of the Fiscal Sustainability Initiative (FSI).

Budget documents and details an be found on the Leap website: LEAP budget summary.

Highlights of interest to WACO members:

  • Funds MRSC (not in the Senate budget)
  • Funds Local Government Fiscal Notes (not in the Senate budget)
  • Funds Board of Tax Appeals (not in the Senate budget)
  • The Fish and Wildlife PILT money would be frozen at the 2009 level (Senate version offered an increase in monies)
  • Takes $50 million from the Public Safety Enhancement Account
  • Takes from state costs for PERS
  • Provides for six new BLEA classes (Senate provided for eight)
  • The budget does NOT fund the Secretary of State’s election upgrades (the Senate budget provided for the upgrades)

There are already a number of proposed amendments to the House budget so this report is a snapshot in time, which may change very quickly and very significantly.   

Priority Bills

Assessors: (SB 5188) The Assessors' current use bill was moved to the Senate Rules Committee - this bill previously had not made the policy cut off.

Auditors: (SB 5187) the Auditors' cleanup bill was referred to House Rules with a majority "do pass" recommendation.

Clerks: (SB 5327) The Clerks' cleanup bill was referred to House Rules with a majority "do pass" recommendation.

Coroners: (HB 1794) The Coroners' bill concerning the death investigations account cleared the house and has been referred to the Ways & Means Committee. The provisions of this bill are covered in the Senate budget proposal.

Treasurers: (HB 1283SB 5189) The Treasurers’ anticipated tax bill. The House version is in the Senate Rules Committee. The Senate bill cleared the Senate and is currently in the House Finance Committee.

Our Progress Thus far

Other Bills of Interest

The following bills of interest were discussed by the Legislative Committee, who then voted to take a position on the bills. 

Support: (HB 1209) This bill allows counties more options in depositories by opening up the pool to credit unions. The House version of this bill has passed the the House, but did not make the March 29 cut-off.

Support: (HB 1594) This bill concerns training and consultation regarding public disclosure. The bill is currently scheduled for a Senate Ways and Means Committee Meeting March 31 at 1:30 pm.

Support: (HB 1595) This bill concerns the costs associated with public records, allowing governments to collect a modest fee for electronic records gathered. The bill is currently in Senate Rules.

Legislative Reception
WACO and WSAC staff and members mingle with legislators and staff during the February 15 legislative reception at Water Street Cafe.

Legislative Receptions

During session we are partnering with WSAC for four legislative receptions at the Water Street Café in Olympia. Please put these receptions on your calendars and give your local legislators a call to invite them to join us.

The remaining reception is:

  • April 5, 6:00-8:00 PM, Water Street Cafe
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