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Dear Friends and Neighbors,
We are down to the final few weeks of the legislative session. With that a lot of the attention has turned to the three budgets – the operating, transportation, and capital are the main focus. However, the biggest news out of Olympia in the last few days is that Washington state will officially have a capital gains tax. I will talk about budgets, the court ruling and more in this update. Please let me know if you have any questions.
Capital gains tax ruling
Recently, the Washington State Supreme Court reversed a lower court decision and ruled the Democrats’ capital gains tax as constitutional. The tax comes from Senate Bill 5096 passed in the 2021 legislative session. I voted against this bill.
The ruling brings out frustration and disappointment. All 49 states and the IRS recognize capital gains as income. The case against the capital gains income tax seemed straightforward. The two dissenting justices stated it very clearly in the beginning of their dissent:
- “Capital gains are income.
- “In Washington, income is property.
- “A Washington ‘capital gains tax’ is therefore a property tax.”
For more on the issue check out some of the stories below.
- Washington Supreme Court’s decision upholding capital gains tax draws cheers, scorn | The Center Square
- Washington Supreme Court upholds capital gains tax | AP/The Columbian
The biggest concern is that this could open the door to future state income taxes. I believe this will eventually cost the average taxpayer, not just those in higher income brackets.
Operating budget
As a member of the House Appropriations Committee, I can tell you the majority party’s proposed spending plan has been drafted with little input from House Republicans. Their budget proposal spends about $70 billion over the next two years. As you can see by the chart below, the rate of state spending has more than doubled over the past 10 years. I am sure you, the citizens of Washington, have not been able to double your budget or increase your spending at this level.
Revenue forecast
The revenue forecast was released by the Economic and Revenue Forecast Council a couple of weeks ago. The forecast, along with the capital gains ruling are helping to drive the budget discussion. At the forecast meeting it was shared that compared to the November forecast, state revenues increased by $194 million for the current 2021-23 budget cycle, but decreased by $483 million for upcoming 2023-25 budget cycle. It also decreased by $541 million for the 2025-27 budget cycle. Keep in mind, while these numbers are “lower” than the numbers projected in November, they are still an increase in revenue, just slower growth.
Capital budget
An important aspect of the legislative session is advocating for local projects that would benefit our communities and region. It’s taxpayer dollars returning to district.
The capital budget contains infrastructure type projects for our K-12 schools, colleges, local governments and community projects where it may be difficult to entirely fund at a local level. The House proposal includes more than $19 million for the 15th District including dollars for the:
- Pasco process water reuse facility;
- Sunnyside Valley Irrigation District;
- Yakima County Stadium;
- Kiwanis Spray Park, lighting and walking trails;
- Othello Regional Water Plan;
- Port of Mattawa Event Center Phase 3 upgrade project;
- Kiwanis Park Futsal Court and restroom;
- downtown Pasco North Plaza;
- infrastructure and repair work for the community and technical colleges; and
- Military Department and Yakima Training Center in our region.
The House must still work out their differences with the Senate capital budget before we adjourn for session. I will share with you the final projects at the conclusion of session.
Transportation budget
The 2023-25 budget is $13.2 billion, and is more consistent with last year’s budget than the governor’s proposal.
It would provide $9.8 billion for WSDOT, including $1.2 billion for Washingtonian State Ferries, $646 million for Washington State Patrol, and $418 million for the Department of Licensing.
The budget is not exactly what House Republicans would do if we were in the majority. However, it reflects a lot of concepts we support and the Democratic chair and our ranking member Rep. Andrew Barkis worked together to come up with a solid, bipartisan plan.
That said, there are some concerns I would like to see addressed in our transportation system and budget including:
- more work to be done for projects for our districts;
- hundreds of millions of dollars caused by Executive Branch mistakes and delays; and
- the authorization of the Transportation Commission to continue development and research to create a road usage charge (RUC), which would have a negative impact on our district and other rural areas.
The road usage charge is basically a vehicle miles traveled tax. This would hurt rural residents who often travel long distances to access work, education, health care and groceries. There are also concerns with privacy and data collection. The state’s track record on protecting private information is poor. Right now the RUC continues to be in the study stage but we are watching it closely.
As for the final transportation budget, once again the House and Senate must work out their differences on a final plan before we adjourn on April 23.
Important public safety issues
Two critical public safety bills continue to be negotiated and debated. If you are following the news, Senate Bill 5352 (vehicular pursuits) and Senate Bill 5536 (drug possession and treatment) you are familiar with these issues.
The law enforcement vehicle pursuit law hit close to home last month when two young children lost their life.
Both bills have advanced out of the House Community Safety, Justice & Reentry Committee but are watered down versions of what we need.
We need to change the police pursuit law back to the “reasonable suspicion” standard across the board for all police pursuits. There was a bipartisan bill, House Bill 1363, introduced at the beginning of the session that would have done that. Currently it is “probable cause.” That is a very high bar. As a result, we are seeing a massive increase in crimes being committed, cars being stolen, and criminals fleeing with little to no concern of law enforcement intervention.
During debate on the vehicle pursuit bill, there have been amendments offered that would:
- Permit an officer to engage in a vehicle pursuit if the officer has reasonable suspicion a person inside the vehicle has committed or is committing reckless driving.
- Permit an officer to engage in a vehicle pursuit if the officer has reasonable suspicion a person inside the vehicle has committed or is committing theft of a motor vehicle.
- allow an officer to pursue an offense that involves an act that is reasonably likely to cause physical pain or injury.
They have been rejected. I remain hopeful for a common sense solution to both the vehicle pursuit and drug possession laws before we adjourn.
Stay engaged
Please contact me with any questions, concerns or comments. Your input helps me represent you and the 15th District in Olympia.
Below are some websites that will help you follow the Legislature during the session and what is happening with state government all year long.
- The Ledger – a legislative news aggregator
- Capitol Buzz – Daily news clips
- Sign up for The Current: An email update from House Republicans
- How you can be involved in the legislative process
It is an honor and privilege to represent the 15th District!
Sincerely,
Bruce Chandler
