Olympia update: Budget proposals for fiscal years 2019-21 released

By: Brad Boswell, Contract Lobbyist Posted: 04/01/2019

Both chambers have released their Operating, Capital, and Transportation budget proposals

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Budget proposals released

Budgets were the primary focus in Olympia last week. On Monday, the House Democrats released their Operating, Capital, and Transportation budget proposals for fiscal years 2019-21.

The Operating budget proposal estimates appropriations of $52.8 billion, a net increase of $2.3 billion over the last biennial budget (2017-19).

Increased spending for behavioral health, K-12 schools and special education, college and workforce training, early childhood education, housing, and homelessness services drove the increase.

The revenue forecast released on March 20 predicted tax collections would be $307 million more than expected for the 2-year budget ending on June 30 of this year and $554 million more for the 2019-21 biennium, bringing the projected revenue available to the state for the 2019-21, two-year budget to $50.56 billion.

To fill a portion of the $2.24 billion hole between the House Democrats' proposed budget and expected revenue, House Democrats proposed three bills:

  1. HB 2156, a capital gains and progressive real estate excise tax (REET)

  2. HB 2157, eliminating  business and operations (B&O) tax preferences for travel agents and an out-of-state sales tax exemption

  3. HB 2158, a B&O tax surcharge for degree-requiring business categories to fund higher education

The Senate Democrats released their Transportation, Capital, and Operating budget proposals later last week. While the spending prioritization was largely similar, the Senate’s appropriations were lower almost across the board.

The Senate also introduced several revenue proposals to fund spending over projected revenues. The proposals include:

  1. SB 5991, creating a graduated REET

  2. SB 5997, eliminating preferential B&O tax rates

  3. SB 5988, reducing a tax preference for prescription drug warehousing to invest in opioid abuse treatment services  

  4. SB 5996, an insurance premium surtax for wildfire prevention

Although the Senate did not introduce a capital gains tax that was tied to the budget, the Senate introduced a separate capital gains proposal.

The revenue would be used to fund the Working Families Tax Credit, to reduce taxes for some small businesses, to reduce senior citizens’ property taxes, and to eliminate sales tax on diapers and feminine hygiene produces. 

Both chambers are working to pass budget and tax bills quickly. The House Operating and Transportation bills were already passed off the floor last week.

Condo liability

Senator Jamie Pedersen’s bill concerning condo liability, ESB 5334, was referred to House Rules on March 26, and on Friday, March 29, the bill was placed on second reading, meaning the bill can go to the House floor for a vote anytime.

Rep. Tana Senn’s condo liability bill, SHB 1576, had a public hearing in the Senate Law & Justice Committee on March 19, but hasn’t been scheduled for further action yet.