Following nearly ten months of interim, it is almost time for legislators to start the 2021 legislative session. Beginning on Monday, January 11, 2021, it will be a 105-day session and the first half of the biennial budget cycle. The 2021 legislative session will be different from any other session as it will primarily be held virtually with committee hearings and floor debates taking place on the Zoom platform. This year, despite not gathering together in Olympia, lawmakers will still be required to pass a balanced budget that will guide the state’s spending for the next two years.
The realities of conducting a virtual session will substantially limit the volume of bills that can be taken up in committee and on the House floor. For this reason, both the House and the Senate have encouraged their members to limit the number of bills they introduce this year in order to focus their work on the critical needs of the state. Democratic leadership has been clear that their priorities this session will be racial equity, response to the COVID-19 pandemic, economic recovery, and issues related to climate change.
There are a number of changes to leadership including a new Senate minority leader, Senator John Braun (R-20). Although the majorities in the House and the Senate will remain the same, the legislature will see several new faces in January. In total, there will be seventeen freshman House members in 2021 and six new Senators. Some sitting legislators lost their elections in the fall. In the Senate, Senator-Elect Twina Nobles (D-28) defeated Senator Steve O Ban (R-38) and Senator-Elect Jeff Wilson (R-19) beat Senator Dean Takko (D-19). Similarly, in the House Rep-Elect Joel McEntire (R-19) prevailed over Rep. Brian Blake (D-19) and Representative-Elect Alicia Rule (D-42) defeated Rep. Luanne Van Werven (R-42).
While the budget picture has improved since spring, the state still faces significant fiscal challenges. Last month, Governor Inslee released his budget. In addition to dipping into reserves, his budget relies on savings in a number of areas. Democrats will be looking for additional revenue to fund their priorities and avoid cuts in services. As in previous budgets, Gov. Inslee proposes a new capital gains tax on the sale of stocks, bonds, and other assets. This proposed tax which would not go into effect until the second year of the 2021.23 biennium would raise more than $3.5 billion over the next four years. The other major source of revenue in the Governor’s proposal is a tax on insurers and managed care organizations. The per member, per month fee would be set and adjusted to bring in $205 million in fiscal year 2023 and about $343 million in the 2023.25 biennium.
The Governor’s budget is the beginning of the discussion. Both the House and Senate will draft their own budget proposals, typically releasing them after the February revenue forecast. The budgets will eventually be negotiated and adopted before adjourning the 2021 Legislative Session.
The 2021 session is likely to include proposals aimed at climate change, wildfire response, homelessness, police reform, plastics issues, unemployment insurance, pandemic-specific labour standards, education, broadband infrastructure, contact tracing, and data privacy. There is a desire on the part of many parties to pass a transportation package this session. Additionally, similar to the Governor, some legislators will be looking for new revenue sources. At this point there are several options on the table including a statewide payroll tax similar to what passed in the City of Seattle last summer, a digital ads tax, or a capital gains tax.