issue area reports | budget and taxation
Budget and Taxation
Tommy Gantz : Tax & Fiscal Policy
In even-numbered years , the Legislature writes a supplemental operating budget to address unforeseen changes since the passage of the previous year ’ s biennial budget . Coming into the 2022 legislative session , it quickly became clear that lawmakers would not be facing a budget deficit as a result of the pandemic , but there was a massive $ 15 billion surplus instead .
The final 2022 supplemental operating budget , Senate Bill 5693 , increased spending by 24.3 % higher than 2019- 21 levels and sets the operating budget to use 80.5 % of the state ’ s surplus for new spending . Unfortunately , the legislature did not backfill the Budget Stabilization Account ( the rainy day fund ) to pre-pandemic levels , despite having more than sufficient means to do so . This session AWB advocated strongly for certainty for the business community , and called for an end to the years of tax increases . We also supported various proposals for tax relief . Over the last three years there have been 22 tax increases passed by the Legislature , generating over $ 40 billion in tax revenues over the next 10 years . Disappointingly , the largest tax cut included in the supplemental budget is just $ 113.1 million over the outlook period via the small-business B & O tax credit .
AWB ’ s Tommy Gantz tells employers in Spokane about the Legislature ’ s major spending increases during a June post-session meeting .
The failure to pass meaningful , broad-based tax relief was a huge missed opportunity given the size of the state ’ s budget surplus and the pain and uncertainty that families and small businesses are experiencing from inflation being at a 40-year-high . We ’ ve seen lawmakers in other states , when presented with large budget surpluses , cut taxes and put money back in the pockets of taxpayers . This session , the Washington Legislature failed to provide anything meaningful in the way of tax relief .
taxes & budget
E2SHB 1015 equitable access to credit
Passed / AWB Supported
AWB supported this bill , sponsored by Rep . Jaqueline Maycumber , R-Republic , which directs the Department of Commerce to create and administer the Equitable Access to Credit Program ( EACP ). The purpose of the program is to provide access to credit for historically underserved communities via grants awarded to qualified lending institutions . This bill also created a credit against business and occupation ( B & O ) taxes owed for contributions made to the program as well as authorizing a maximum B & O tax credit of $ 1 million per taxpayer per year and a total B & O tax credit for the Program of $ 8 million per year . E2SHB 1015 easily passed out of the house 95-1 in 2021 then stalled until the 2022 session . This session , the bill was amended slightly and sailed through the Senate 46-02 . The House then overwhelmingly concurred with the Senate version 98-0 .
HB 1924 hog fuel tax exemption
Failed / AWB Supported
AWB supported this bill , sponsored by Rep . Steve Tharinger , D-Port Townsend , that would extend the sales and use tax exemption for hog fuel from June 30 , 2024 , to June 30 , 2034 . Hog fuel is created from wood waste or debris from the forest floor for use as biofuel . Biomass is a source of renewable energy and is an important option for utilities to cost-effectively comply with clean energy requirements . This bill
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