February 26, 2018
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Senate approves budget; House makes major changes as end of session approaches



This year's supplemental budget is moving quickly through the final days of the legislative session, thanks in part to windfall tax collections coming in well above expectations.

The Senate voted Friday on a party-line vote to give nearly $1 billion more to public schools, mostly for increased teacher salaries as mandated by the state Supreme Court's most recent McCleary ruling. The Senate budget has no new taxes but would dip into the state’s reserves and constitutionally-protected rainy-day fund to balance. The plan would take $403 million from the Budget Stabilization Account to provide $0.31 per thousand of assessed value in state property tax relief in 2019.

With uncertainty surrounding how the Legislature will address property taxes, Senate Majority Leader Sharon Nelson, D-Maury Island, took the unusual step of asking property owners to hold off on paying their property taxes until after the Legislature's scheduled March 8 adjournment. Property tax payments are due April 30, so there is no harm in waiting, according to the Department of Revenue.

Sen. Christine Rolfes, D-Bainbridge Island, the chair of the Senate Ways and Means Committee, said the Democratic budget is more than the usual "modest update" of the two-year budget that would normally come in an off year.

“With this budget, we take care of two of the biggest challenges our state faces, ample funding for education and adequate support for mental and behavioral health,” Rolfes said.

Republicans in the Senate, meanwhile, took the unusual step of proposing a completely separate budget. The GOP proposal would give a much larger property tax cut. Senate Minority Leader Mark Schoesler, R-Ritzville, said the state should also offer tax relief to manufacturers.

The House is expected to vote today on its budget. To pay for its increased spending, the House would add a new capital gains tax. The House also proposes two years of property tax reductions in 2019 and 2020 in the range of $0.44 -$0.50 per thousand of assessed value to be paid for by $1 billion from the Budget Stabilization Account. In 2021 and thereafter, property taxes are to be reduced by the amount of capital gains taxes collected less a deduction for the amount necessary to pay for an adjustment in the senior citizen, disabled persons, and qualifying veterans property tax exemption.

A capital gains tax is not in the Democratic Senate budget, and Rolfes said she did not expect to pass a new tax when the state is collecting more revenue than expected.

Also being discussed is a new carbon tax, but neither budget factored the expected collections from the tax into their budgets.

The Spokesman-Review has more on the budget.

For more information on this issue, contact AWB Government Affairs Director Clay Hill at 360.943.1600.



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Capital Gains Tax
All Manufacturers Need Relief


Manufacturing jobs key to all of our communities

By AWB President Kris Johnson

The health of Washington state's manufacturing sector is a bellwether for the strength of our overall economy, and a key driver of economic opportunity for families in every city and small town across the state.

The sector is vital to the state. Manufacturing jobs support families with livable wages and benefits and they grow the local economy and tax base to ensure funding for critical services.

Along with all that positive news, is the reality is the sector needs some support.

Since 2000, Washington has lost more than 50,000 manufacturing jobs, the majority of which are not in the aerospace sector.

The good news is lawmakers are currently considering bills that would reinstate the uniform B&O tax relief. It's a move our members support as one way to jumpstart job creation in every part of the state...

Read the full guest column in The Olympian
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