Dear Friends and Neighbors,
A recent visitor asked me about my top legislative priority. That was an easy one: jobs. Good things happen when more people are employed, and the Legislature can do much through tax policy and regulations to preserve jobs and encourage job creation. As a member of the Senate Labor and Commerce Committee, I am on the front line in working to make our state a better place to do business. Also, a stronger economy generates more revenue to support state programs and services, without the need for higher taxes.
With the end of the 2018 legislative session less than two weeks away, the Legislature has an unprecedented opportunity to encourage job creation while offering the sort of tax relief that can help keep the state economy humming. But so far, the new Senate majority has fallen short.
Operating budget proposal fails to deliver for families, employers
Last year the Legislature approved three new budgets: one for operations, one for capital investments, and one for transportation projects and operations. This year our budget work involves reopening those two-year budgets and making mid-course adjustments – usually in response to issues or situations that could not have been foreseen. The changes are made through what are called “supplemental” budgets.
My Democrat colleagues who now control the Senate brought all three of their proposed supplemental budgets up for votes late Friday. I supported the capital and transportation budgets but not the supplemental operating budget. These two reasons alone are enough:
- Half-hearted property tax relief: My newsletter last week detailed the effect of last year’s education-funding reform on this year’s property tax statements. To sum it up, the property tax increase people are seeing statewide right now, before tax rates drop in 2019, is not entirely due to the Legislature’s action. Our bipartisan K-12 agreement accounts for less than two-thirds of the tax “spike” in our part of Clark County, contrary to claims you may have heard. Also, the Legislature now has access to more than $2.4 billion that wasn’t available when we approved the new education-funding approach. That is enough to fund what amounts to a full rollback – this year – of the 2018 tax spike.A reduction in property tax means more money for a family to invest in ways that tend to be good for an economy. Unfortunately, the Senate majority’s proposed operating budget offers only partial property tax relief, apparently delayed until next year. The owner of a home with an assessed value of $300,000 would get about $93. In comparison, the bipartisan legislation I am sponsoring (Senate Bill 6525) would reduce that same homeowner’s property tax by about $240 this year.
- Another slap at Washington manufacturers: In late 2013 the Legislature reduced a tax rate for Washington’s aerospace manufacturers. The intent was to attract more aerospace jobs in general and specifically the next phase of Boeing’s 777 jetliner. Last year (and belatedly, in my book) we approved a bill to gradually reduce the tax rate for the state’s non-aerospace manufacturers. It was a matter of fairness. Even so, the governor vetoed it.The Senate majority could have stepped up and included the tax fairness for manufacturers in its supplemental budget package. A lower tax rate would mean more money to use in hiring, or expanding, or simply keeping the doors open. Unbelievably, my Democrat colleagues sided with the governor in continuing to deny fairness to manufacturers that are not part of the aerospace industry.
Better choices in Republican alternative budget
My Democrat colleagues did not rise to the occasion with their operating budget proposal. However, Republicans put a plan on the table Friday that would have provided nearly $1 billion in property tax relief and cut tuition for community and technical college students and made historic investments in mental health treatment – all while supporting tax fairness for manufacturers, and leaving our financial reserves intact. I voted in favor of this very reasonable approach, but unfortunately, it was rejected on a caucus-line vote.
I appreciate that the budget pushed through by the Senate majority is in line with the state’s four-year balanced-budget law. It also preserves much of the historic investment we made in K-12 education last year. But it is too far off-target by failing to provide meaningful tax relief when state government can readily afford it (thanks to a state economy that gained in strength during five years of stable Republican tax policies).
There is still time to improve on that budget before it goes to the governor’s desk. I hope my Democrat colleagues take a closer look at the alternative we proposed, and come up with a final version deserving of bipartisan support.
Yours in service,