The legislative session is more than half over, but time is critical because next month will be too late – bills will pass quickly during the next few weeks. Action needs to take place now, if we are going to make an impact.
Today’s message is budgets and taxes – Republicans believe that our debt is a consequence of over-spending, not one of insufficient taxation. We believe that the tax burden is already heavy, and further increasing taxes will reduce incentives to work and invest, resulting in lower economic growth and higher unemployment.
Now on to the bills –
SB 5129 – An act related to increasing revenues for the support of state government By Senator Rolfes. You guessed it – this is the bill that creates an income tax. It’s called a capital gains tax, but the Democrats are all very open about the fact that if they can get this tax passed under the guise of taxing only the very rich, they can get the Supreme Court to be good with it and will be free to then go on with a regular income tax. They believe the current Supreme Court is much more activist and left-leaning than the court that declared an Income Tax unconstitutional. If this bill passes, the current court may overturn the previous court decision. The Democrats are counting on it. But that’s not all. This bill also provides for a dramatic increase in B&O tax for services – things like accountants, engineers, doctors, hair stylists, etc. This bill has only had a hearing, so people may think it is dead. It is not. Any bill that is NTIB, or Necessary To Implement the Budget, is very much alive until the last gavel goes down at the end of April. If the budget spends a lot more money than we have, they will be looking for sources of new money, and this is a favorite method.
Link to the bill – https://app.leg.wa.gov/billsummary?BillNumber=5129&Year=2019&Initiative=false
If you want to see what the bill does in layman’s terms, click on the link in the middle of the page that says Senate Bill Report. If there are two or more, the most current one is at the bottom.
SB 5313 – A bill concerning local school levies by Senator Wellman. Many school districts gave out more money than they were expected to have in the future when they negotiated with teachers this past summer. They have now come to the legislature for more money. They way they want to do this is to allow for higher local levies. This is a terrible bill. We just got done with years of litigation, because local levies are not an equitable way to pay for education. Relying on local levies means your school district gets either a boatload of money if you are in a property rich district or very little if you are in a property poor district. This bill is structured to “save the state money.” Guess how they do it – they make the local districts make up the loss by raising local levies even higher. Not only that, but there is a strange little section that says school districts are limited to $2500 per pupil for each school district except for big school districts. They will get $3000 per student. Really – it’s in there. However, I don’t do nearly as good a job as Senator Braun in explaining why this is bad, so the first link I give you is his Economic Sense newsletter about the subject. (note – If you want to know anything about the budget, please read his Economic Sense documents – there are 24 editions. Nobody in Olympia knows the subject better than he. Plus, there are footnotes to give you the underlying data to support the facts in each document).
Link to the bill – https://app.leg.wa.gov/billsummary?BillNumber=5313&Initiative=false&Year=2019
Link to a Seattle Times article regarding local levies – you know it’s got to be bad if the Seattle Times doesn’t even like it! https://www.seattletimes.com/opinion/editorials/lawmakers-eye-local-taxpayers-again/
SB 5991 – Increasing funding for education by establishing a graduated real estate tax by Senator Rolfes. We have a housing problem in this state because of heavy regulatory burdens on new construction, rentals, and landlords. When the supply goes down, the price goes up because the commodity is scarce. It’s simple economics. This bill increases the real estate tax which will do nothing but drive the cost up even further. Just the opposite of what we need to do – increase the supply. This bill was just recently introduced, so you can be that it’s one of the top ones on the list of bills they want to use to get more money. Changing a tax like this is less obvious than an increase in sales or gas tax, so it is more likely to fly under the radar. It’s also geared to really hit “rich” people hardest, so it plays to the current atmosphere that requires us to punish success. The bill is so new, it doesn’t have a bill report yet, but they will add it when they hear the bill in committee.
There are other tax bills, but they are related to other policy areas, so I’ll address them in later emails – this email is already long enough. However, I want to leave you with another of Senator Braun’s Economic Sense newsletters that will explain why we don’t need these taxes. As Ranking Member of the Ways & Means Committee (the name for the budget committee), he has maintained that the expectation of a $3.75 billion increase in revenue over the last biennium’s budget amount is quite enough to cover our expenses. This newsletter will give you a general overview of the approach favored by Republicans.
Even though Republicans are in the minority, the hairdressers proved this year that grass roots activism really works. They organized over one weekend and flooded their members’ email boxes with letters. They stopped a bill cold within a few days. It can be done, but it means you have to take action. Please consider spreading this information to others and take action by following the guide that was posted in an earlier note that was titled “How to Participate in the Legislative Process.”