January 26, 2017
Governor's top staff talks budget, taxes and federal actions at Lobby Lunch
The speakers were Scott Merriman, the director of the state Office of Financial Management; Keith Phillips, the governor's policy director; and, Drew Shirk, the governor's executive director for legislative affairs.
The main topics: the 2017-19 state operating budget, the governor's $4.4 billion tax proposal and the new wave of executive actions in the "other Washington" that could impact Washington state.
"Right after the election, the governor faced a $6 billion dollar hole in the budget. And, $1 billion of that was just caseload increases," Shirk said.
Merriman explained the long process to build the state's two-year budget and said the hardest part was figuring out how to pay for all of government and fund the final piece of the state Supreme Court's 2012 McCleary education funding ruling, which is levy reform.
The rest of the shortfall, Merriman said, is due to required mental health reforms, for which the state is under a court order, and addressing homelessness and opiod addiction that are often linked.
"We proposed a series of revenue ideas, none of them are new. I believe all of them have been around for a while," Merriman said in explaining the need for new and higher taxes.
One of which is a tax on carbon emissions, which will financially impact families and employers across the state, some believe will reduce carbon emissions in the state.
However, Merriman said it was included in the governor's tax package as a "revenue tool, first and foremost" not climate policy, adding that it is just one "tool to solve the broader budget problem."
But, he said, the governor is open to new ideas and that "just saying 'no' is not going to work."
Shirk reiterated the point, telling attendees they need to be creative to reach a compromise that solves the budget puzzle.
"It can't be a zero-sum game," Shirk said. "Everyone has to get something out of any deal. There has to be a true compromise."
A new issue, Phillips said, is uncertainty at the federal level.
"It's too early to know what the implications are of all the executive orders on the state, but the governor is concerned with what he's seeing" Phillips said.
He was referring to the new administration's raft of executive orders to begin to repeal and replace the Affordable Care Act (ACA), which Phillips said would impact 750,000 Washingtonians, and those that create confusion on immigration issues at the state and local level.
Shirk said the governor is watching actions on the ACA and other policies closely to assess what they mean for Washington state.
Of the administration's tweeting, Shirk said, "you can't focus on the tweets; you have to focus on the actions."
All three speakers urged business leaders to keep the lines of communication with them open as budget and tax negotiations continue.
For more information on budget and tax issues, contact AWB Government Affairs Director Eric Lohnes. For information on federal and education issues, contact AWB Government Affairs Director Amy Anderson.