April 1, 2019
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AWB's Clay Hill on TVW's The Impact: Building a budget on capital gains tax is 'extraordinarily reckless'



Building a state budget that relies on implementing a 9.9 percent capital gains is a reckless approach to state budgeting.

That was the message from Clay Hill, AWB's government affairs director for tax and fiscal policy, when he appeared on TVW's program The Impact last week.

Hill joined Misha Werschkul, executive director of the Washington State Budget & Policy Center, and host Mike McClanahan for a discussion of the state budget that House Democrats proposed last week. The budget relies on new and higher taxes, including a 9.9 percent capital gains tax, increased business and occupation taxes for some service businesses and higher real estate excise taxes.

If approved, the capital gains tax proposal would take Washington from zero to third-highest in the nation, Hill notes.

"It's extraordinarily reckless to build a budget that books revenue from a capital gains tax," Hill said, noting not only that it's unconstitutional but also extremely volatile.

That's a point that Jason Mercier, the government reform director for the Washington Policy Center, made in an op-ed that ran in The Seattle Times on Friday. Mercier notes that every state in the union, as well as the Internal Revenue Service, categorizes capital gains as income, and a capital gains tax as an income tax. He also noted that former California Gov. Jerry Brown persuaded voters in 2014 to pass a constitutional amendment to protect the state's budget from the volatility of the California's capital gains tax.

"Washingtonians deserve an honest tax debate," Mercier writes. "It is time to call a capital-gains tax what it is — an income tax."



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Spring Meeting
A Better Way Forward


Four reforms to rein in state spending, avoid higher taxes

By Rep. Drew Stokesbary, R-Auburn

Last week, House Democrats unveiled their $53 billion state operating budget proposal for the upcoming 2019-21 biennium. Unsurprisingly, their budget dramatically increases state spending -- funded by new taxes on businesses, home sales and capital income -- proving yet again that it's easy to spend money that isn't yours.

All told, their proposal grows spending by more than $8.5 billion beyond current levels. For context, when I was first elected in 2014, the state budget spent $33.7 billion. Between economic growth and new taxes, state revenue will have increased by about 57 percent in five years.

Has your salary grown by 57 percent since 2014? Probably not, as average annual wage growth is hovering below 4 percent.

Structural issues are largely responsible for this alarming rate of budget growth. Each year, lawmakers enact all sorts of new programs and services, predicated on promises of long-term savings and improved social and health outcomes. Once enacted, these programs are almost always automatically funded in subsequent years, with virtually no oversight or review by the Legislature.

The result: spending persistently outpaces revenue, enabling our most essential services to be held hostage in exchange for new taxes.

There is a better way...

Read the full guest editorial in The Seattle Times
Facts From the Tri-Cities


Salmon and dams can coexist

By Kennewick May Don Britain; Pasco Mayor Matt Wakins; Richland Mayor Robert Thompson; and West Richland Mayor Brent Gerry

For more than 20 years. there has been an ongoing debate about the impact of the four Snake River dams on the Pacific Northwest's salmon population. Since the 1970s, billions of dollars have been spent to upgrade the dams and to improve salmon habitat.

The results? According to the Bonneville Power Administration (BPA), the average number of returning salmon and steelhead are more than double what they were when counts first began when the Bonneville Dam started operations in 1938. Despite this clear evidence that dams and fish can coexist, the debate continues.

More recently, the struggles of the southern resident orca population have further stoked the debate. No one disagrees that the health and future of the orca population must be preserved. However, the numbers clearly show that removing the dams will not save the orcas...

Ironically, at the same time there is a push for the Washington state Legislature to fund this study on the impacts of removing the dams, there are also several bills to push for carbon reduction. If the goal in Washington is to reduce carbon, the existing clean hydropower resources play an essential role in keeping our air clean. These dams generate some of the cheapest, most reliable, carbon-free electricity in the Pacific Northwest...

Read the full guest column in The Seattle Times
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