capitol watch
Policy and Politics: A look at 2017
In Washington state, the 2017 Legislature just began its 105-day session, while in the other Washington, a new president was sworn in.
Bobbi Cussins
This year’ s 105-day affair is a huge challenge for lawmakers, not only because it is the major budgeting year, but the Legislature is also now grappling with the most complex piece of complying with the 2012 state Supreme Court’ s McCleary education funding ruling— levy reform. This sets the stage for more talk of tax hikes, which began with Gov. Jay Inslee’ s budget rollout in December. Whether tax bills land on the governor’ s desk when session adjourns, which many believe may not be until late summer, is anyone’ s guess.
In Washington state, the focus of the 105-day, 2017 legislative session is formation of the state’ s roughly $ 41 billion two-year operating budget.
Included in the negotiations is one wrinkle, and it’ s a big one: local property tax levy reform, which is the final piece to comply with the McCleary education funding ruling handed down in 2012 by the state Supreme Court( see page 46).
The cost of levy reform, estimated at $ 2-3 billion every two years, will impact everything in the state budget, from state services to agency budget adjustments to meet the price tag.
And, it could impact employers as talk of raising taxes to fund the change is front and center.
“ This session will be very challenging with regard to taxes and spending,” said Gary Chandler, AWB vice president, government affairs.“ Employers should brace for more complex and controversial policies to arise. Those could include workforce and labor measures, climate policies and possible ramifications of federal action on the Affordable Care Act( ACA), which may be‘ repealed and replaced,’ all of which has unknown costs and consequences to the state’ s competitiveness and economy.”
Chandler’ s message to employers: Now is the time to engage in the legislative process.
two-year budget, taxes
Gov. Jay Inslee introduced his version, the first version, of the state operating budget Dec. 14. This tradition kicks off the starting point of the legislative back and forth.
In the face of growing tax collections, 6.6 percent in the 2017-19 budget cycle, or $ 41.9 billion, and 8.9 percent in the 2019-21 budget, adding up to nearly $ 45 billion, the governor proposed a litany of new and higher taxes he claims will raise nearly $ 4.3 billion, purportedly for K-12 education spending, including:
• A new capital gains tax on high-income residents;
• A new carbon tax;
• Closure of five tax preferences; and,
• A 1 percent Business and Occupation tax increase for service-sector businesses.
42 association of washington business