Week 11 Legislative Update: House and Senate Democrats Release Budget Packages

By: Boswell Consulting and Brooke Davies Consulting Posted: 03/29/2021

Both Chamber’s Budgets rely on federal dollars, Budget Stabilization Account, and capital gains tax

Friday, March 26, was the opposite house policy committee cut off, when all bills that passed the House needed to be out of their Senate policy committee and all bills that passed the Senate needed to be out of their House policy committee in order to stay alive. The next cut off is on Friday, April 2, when all bills need to be out of their opposite house fiscal committee. As a reminder all bills deemed necessary to implement the budget are not subject to these cut offs. 

This week, the House and Senate Democrats released their respective Transportation, Capital, and Operating Budget proposals for the fiscal years 2021-2023. The Senate operating Budget introduced by Senator Rolfes (SB 5092) estimates appropriations of $59.2 billion over the next two-year biennium. Rolfes’ proposal also leverages an additional $7 billion in one-time federal funds from the American Rescue Plan and a one-time transfer of $1.8 billion from the Budget Stabilization Account to the General Fund in fiscal year 2021. You can read more about the Senate proposal here, and you can watch the Senate Democratic press conference on their budget release here.

The House budget introduced by Rep. Ormsby (HB 1094) appropriates $58.3 billion for the 2021‐23 biennium. Some investments are temporary, relying on one-time funds from the American Rescue Plan Act and/or Washington’s Budget Stabilization Account. Other investments are long-term and require permanent funding sources. You can read more about the House Democrats “Washington Recovery Budget” here, and you can watch the press conference here.

Both the House and Senate proposals assume passage of a capital gains tax. Both budget proposals fund the Fair Start for Kids Act and the Working Families Tax Credit. The House proposal was heard last weekend on Saturday, March 27 in the House Appropriations Committee and is scheduled for executive session today, March 29. The Senate proposal had a public hearing in the Senate Ways & Means Committee on Friday, March 26, and is also scheduled for executive session today, March 29.

House Democrats' proposed capital budget (HB 1080) would fund $5.7 billion in construction projects throughout the state, including $400 million in federal funding for investments in water, sewer, and broadband service. Senate Democrats’ proposed capital budget (SB 5083), which would be the largest in state history, would build $6.2 billion in priority infrastructure across the state. 

On Monday, March 22, Rep. Fey released his proposal (HB 1135) for the second supplemental transportation budget for the 2019-21 biennium which would spend $9.4 billion and the new transportation budget for the 2021-23 fiscal biennium which would spend $10.933 billion. On Sunday, March 28, the transportation spending portion of the statewide revenue package was introduced (HB 1564). It is scheduled for a public hearing on Thursday, April 1 at 9am.  On Tuesday, March 25, Senator Hobbs released his proposal (SB 5165) for the second supplemental transportation budget for the 2019-21 biennium which would spend $9.08 billion and the new transportation budget for the 2021-23 fiscal biennium which would spend $10.7 billion.

Now that all the budget proposals have been released, negotiations will begin. Both chambers will work to pass their respective budgets out of the House of Origin, however, ultimately only one negotiated version of each budget proposal will pass. Week twelve will be focused on fiscal committees as the fiscal committee cut off is Friday, April 2. From there both chambers will head back to the virtual floor to work on passing bills from the opposite house. Session is scheduled to end on April 25.

Economic Recovery and COVID Relief

The Washington equitable access to credit act, HB 1015, would direct the Department of Commerce to create a program to award grants to qualified lending institutions to provide access to credit for historically underserved communities. There was a public hearing on Tuesday, March 23 in the Senate Committee on Business, Financial Services & Trade, and on Thursday, March 25 the Committee took executive action on the bill. (The Chamber sent a letter urging the Committee to pass the bill ahead of the policy committee cutoff on Friday, March 26.) The committee adopted a striking amendment offered by Senator Mullet which limited the program to two years from ten and also changed the funding source. The Mullet striker uses $16M in federal funding, instead of the $8M per year of state money through tax credits. Proponents, including the Chamber, have concerns with the striking amendment. This bill now moves to the Senate Ways & Means committee, with a public hearing scheduled for Wednesday, March 31.

Housing Affordability

Legislation sponsored by Senator Mona Das, SB 5287, concerning the multi-family tax exemption (MFTE), was heard in the House Finance committee on Tuesday, March 16. While the Seattle Metro Chamber had concerns with previous versions, we signed in pro at the public hearing earlier this month.  It appeared as if all of the stakeholders have reached an agreement in public testimony with one minor outstanding concern from the tenants, but the bill has not yet been scheduled for executive action.

SSB 5160 sponsored by Senator Kuderer saw executive action in the Housing, Human Services & Veterans Committee on Thursday, March 25, with the bill receiving a do pass recommendation.  This legislation addresses landlord-tenant relations by providing certain tenant protections during and after public health emergencies, providing for legal representation in eviction cases, and authorizing landlord access to state rental assistance programs. The bill has been referred to House Appropriations.  

Legislation sponsored by Rep. Ryu, HB 1070, which would modify allowed uses of local tax revenue for affordable housing and related services to include the acquisition and construction of affordable housing and facilities remains on the Senate floor calendar. The Chamber supports this legislation, which would make changes to support King County’s Health through Housing program. 

The “just cause” bill sponsored by Representative Macri, HB 1236, remains on the Senate floor calendar where it can be pulled at any time for a vote.  The official title of the legislation is an act relating to protecting residential tenants from the beginning to end of their tenancies by penalizing the inclusion of unlawful lease provisions and limiting the reasons for eviction, refusal to continue, and termination. 

Tax Increment Financing

Legislation authorizing local governments to designate tax increment financing areas and to use increased local property tax collections to fund public improvements, HB 1189, remains in the Senate Rules committee where it can be pulled to the floor at any point for a vote. Larger Port districts had expressed concerns regarding  impacts to their taxing districts, however these concerns have been addressed and the larger Ports have moved to a neutral position on the bill. The Chamber supports the bill.

Employment and Workplace Legislation

Legislation expanding coverage of Washington’s Paid Family and Medical Leave program, SSB 5097, was referred to the House Appropriations Committee on Monday, March 22 with a public hearing scheduled for Tuesday, March 30. This legislation expands the definition of family member, for purposes of the Paid Family and Medical Leave program, to include any individual who regularly resides in the employee's home.

Legislation establishing health emergency labor standards, SB 5115, passed out of the House Labor and Workplace Standards Committee on Wednesday, March 24. The committee adopted a striking amendment offered by Rep. Liz Berry (D-36) that makes several changes to the underlying bill.

Legislation concerning unemployment insurance claim adjudicators, SB 5193, was placed on second reading in the House Rules committee on Friday, March 26. 

Police Reform

After passing out of the Senate Law & Justice Committee, HB 1310, which is legislation concerning permissible uses of force by law enforcement and correctional officers, sponsored by Rep. Jesse Johnson, is scheduled for a public hearing on Tuesday, March 30 in the Senate Ways & Means Committee. Current law allows police to complete an arrest by any means necessary. HB 1310 sets the expectation that de-escalation should be an officer’s first instinct and that deadly force should only be a truly necessary, last resort. 

Legislation sponsored by Senator Jamie Pedersen, SB 5051, modifies the priorities and composition of the Criminal Justice Training Commission (CJTC) and expands the background investigation requirements for persons applying for peace officer, reserve officer, and corrections officer positions. This bill passed the House Public Safety Committee and been referred to the House Appropriations Committee for further consideration.

Legislation concerning an officer's duty to intervene, SB 5066, has been referred to the House Appropriations Committee as well, with a public hearing scheduled for Tuesday, March 30. This legislation requires a peace officer to intervene when the officer witnesses a fellow peace officer engaging in the use of excessive force. A do pass recommendation was made.

HB 1054 from Representative Jesse Johnson remains in the Senate Rules committee.  The bill establishes requirements for tactics and equipment used by peace officers, prohibiting chokeholds and neck restraints, use of dogs during arrest, and tear gas and certain types of military equipment.