Taxes are on everyone’s mind as the Legislature rushes to complete its work by the scheduled adjournment on Sunday, April 28.
The only bill the Legislature has to pass before it can go home is the state Operating Budget, HB 1109. The House, Senate and Governor have been negotiating the final details of the two-year spending plan. Our state’s fiscal year runs from July 1 to June 30.
The big debate now is how much new revenue or taxes the Legislature is willing to support. There are close to $4.5 billion in proposals floating around the Capitol. Everything from a new capital gains tax, an increase in the real estate excise tax, increases in the services business and occupation tax, an increased tax on insurance premiums, and making the sales tax exemption for non-residents a remittance program, to name a few.
The frustrating thing for me is that the state is enjoying an unprecedented financial boom. We have billions more in revenue than we did last year. Unemployment is at an all-time low. Construction, especially in the Puget Sound/Seattle region, is off the charts. Yet the legislature doesn’t feel it is enough.
The proposed Operating Budget increases spending that will create a “bow wave” in the future to try to maintain the new spending. There are no cuts or efficiencies realized in this budget. My fear is that when the economy slows or drops rapidly, our state has set itself up for another major downturn or recession.
Washington Retail has testified against all of these ill-advised tax proposals and instead suggests the state live within its considerable means and put funds away for the eventual rainy day.