Dear Friends and Neighbors,
We are down to the final week in the regular legislative session. The focus on adjourning on time has turned to proposed budgets and taxes proposals – lots of tax proposals.
In the House Finance Committee on Friday, Democrats passed a number of bills that would increase taxes, including:
- a capital gains income tax;
- a business and occupation tax surcharge on various services;
- a graduated real estate excise tax; and
- a change to the nonresident sales tax exemption to an annual remittance program.
Despite record revenues, a $3 billion surplus, and voters rejecting tax increases time and time again at the ballot box, the majority party continues to introduce unneeded and unwanted tax increases. It is putting our state in a very precarious position financially. We are looking at a fiscally unsustainable and irresponsible budget. On Friday, Rep. Larry Hoff and I issued a statement on the proposed taxes. Click here to read it.
My Republican colleagues and I offered numerous amendments on the bills to try defeating the measures. Common sense ideas, such as not increasing the taxes on health care, prescriptions, and certain kinds of groceries were turned down. Other amendments that would have confined the damage to the least amount of people were also shunned. House Democrats hold a 9-4 majority in the Finance Committee, and were clear that they did not want to allow flexibility in their tax ideas.
Along with offering the numerous amendments and voting against the $4.5 billion in new tax increases passed by the Democrats, my Republican colleagues and I were loud and clear about where we stood on the tax proposals. Watch some of our committee remarks here.
The new capital gains income tax being proposed is not only the first step toward a new state income tax, but it is unconstitutional, unreliable and unpopular. To watch my recent video on a capital gains income tax, click the photo below.
Their tax plan also includes turning the state's nonresident sales tax exemption into a yearly remittance program—a move that would be devastating to our Southwest Washington businesses. Click here to read a column Rep. Larry Hoff and I submitted to the Vancouver Business Journal on the issue.
We also penned a column for The Columbian: Tell Democrats there's no need to raise taxes.
The business and occupation tax would impact tens of thousands of businesses across Washington, many of our small mom and pop stores.
The House Democrats' proposed operating budget, that passed the House on a party-line vote about a month ago, would spend about $53 billion for the 2019-21 biennium, while our current operating budget spends about $44.4 billion. That is an increase of $8.6 billion or 19.4 percent over last year's budget. State spending has increased 70 percent since 2013, the year Gov. Inslee took office.
The majority party and the governor continue to stand by their position that taxes must be increased, despite record state tax collections and a budget surplus. We have enough money to fund all of our state's budget priorities without raising more taxes on those who are already sending historical amounts of revenue into the state coffers.
About 80 percent of economists believe a downturn in the economy is coming. We must budget responsibly. Otherwise, we end up repeating history and will be back in a Great Recession situation like 2007-2008 when painful cuts had to be made.
I am hopeful budget writers can come up with a more sustainable and fiscally responsible proposal so we can adjourn on time – April 28.
Please do not hesitate to contact me if you have any questions on the proposed budget, taxes or any other state issues before us in Olympia.