How Would GOP Budget If They Controlled Olympia? A Pair Of Spending Blueprints Offers Clues
As majority Democrats in the Washington Legislature lay the groundwork for tax increases to fund the next two-year budget, minority Republicans are jumping out ahead by releasing their own tax-averse budget blueprints.
The plans unveiled by House and Senate Republicans in recent days have no chance of passing the Democratically-controlled Legislature, but do offer alternative sets of spending priorities. The budget frameworks also allow Republicans to draw a philosophical line in the sand around new and higher taxes.
“The people of our state need to know it’s possible, even during a pandemic, to have a budget that doesn’t cut services and without more taxes,” said state Sen. Lynda Wilson, the ranking Republican on the Senate Ways and Means Committee.
The Senate proposal, released last week, and the House proposal released Tuesday would both spend about $55 billion over the next two years – roughly $3 billion less than the spending plan Gov. Jay Inslee proposed in December. Nonetheless, that still represents an increase in spending over the current biennial budget which is on track to spend about $52 billion.
“It continues to grow the budget, but on a much more responsible glide path,” said state Rep. Drew Stokesbary, the ranking Republican on the House Appropriations Committee.
In the short-term, both Republican budgets prioritize funding for schools with the expectation that districts get students back into the classroom.
Calling it the “equity issue of our day,” the Senate Republican budget would spend more than $1 billion in federal funds to support a return to in-person school. At the same time, Senate Republicans would preempt local decision-making and require school districts that meet public health metrics to reopen their buildings to students.
House Republicans, meantime, would offer low-income families $300 stipends to defray the cost of remote learning.
Amid recent calls to defund police, the Senate Republican budget instead calls for a 50 percent increase in law enforcement academy slots and a boost in law enforcement and firefighter pension benefits.
House Republicans, meanwhile, would direct more money to cities to address homelessness, but with strings attached. To be eligible to receive the funding, cities would have to agree to clear homeless encampments near schools and parks and ban so-called safe injection sites.
Other spending priorities in the Republican budgets include:
- Full funding for the Department of Natural Resource’s Forest Health Plan
- Accelerated expansion of broadband to underserved parts of the state
- Increased funding for mental health and child care
- Funding for body scanners for all state prisons
- 1,000 new science, technology, engineering and math slots at state colleges and universities
- Higher Medicaid rates for providers
- A boost in tourism marketing
On the tax side of the ledger, Senate Republicans would take the dramatic step of eliminating the state’s business and occupation (B&O) tax on manufacturing with the goal of jumpstarting that sector, which has shed an estimated 70,000 jobs over the past two decades. To help offset the estimated $600 million in lost revenue over two years, Senate Republicans would impose a sales tax on legal services.
Senate Republicans would also give voters a chance at the ballot to overturn a new payroll tax set to take effect next January to fund a first-in-the-nation long-term care benefit.
Meanwhile, House Republicans would direct temporary B&O tax relief to restaurants and other businesses “hard-hit” by the pandemic and resulting recession.
In a move that might be viewed as trying to beat Democrats at their own game, both Republican budgets would fund, albeit at different levels, the state’s working families tax credit. Legislative Democrats passed the policy in 2008, but it was never funded in the wake of the Great Recession. Inslee’s December budget contemplates funding the tax credit in future years.
“Now, more than ever, families need more money in their accounts to do the things they need to do to get through this tough time so we fund that,” said Republican state Rep. Chris Corry.
As with Inslee’s plan, both Republican blueprints propose to spend down the state’s $1.8 billion rainy day fund. But unlike Inslee, Republicans insist the budget can be responsibly balanced without resorting to taxes.
In lieu of taxes, House Republicans insist they could free up $6 billion from a combination of more strategic use of federal dollars, cuts to state agencies and the elimination of “unnecessary bureaucracy.”
Their plan calls for, among other things, cutting the headquarters budgets of large state agencies by 10 percent, consolidating state pension systems and canceling bonuses for teachers who get their National Board certification, which they say don’t correlate to better outcomes for students.
On Tuesday, Inslee’s budget director, David Schumacher, rejected the idea that large savings could be achieved by eliminating bureaucracy or ineffective programs.
He summed up the approach as: “Pretend the cuts don’t impact citizens, use one-time tricks, cut taxes, wave your hands and assume that it balances.”
Also weighing in Tuesday on the Republican plans were the lead Democratic budget writers in the House and Senate.
“I welcome all ideas and solutions as we continue our work crafting a smart and sustainable budget that will guide state spending over the next two years,” said Senate Ways and Means Chair Christine Rolfes.
The House’s lead budget writer, though, was less diplomatic.
“I will tell you that I am focused on a budget that reflects the March economic and revenue forecast, not one that relies on one time money for permanent tax cuts and hurts struggling families and communities of colors,” said Timm Ormbsy, the House Appropriations Chair.
Even as details of the Republicans proposals were being digested in Olympia on Tuesday, Senate Democrats were preparing to pass a version of the capital gains tax out of the Ways and Means Committee.
Majority Democrats are expected to unveil their budget proposals in late March.
A new state capital gains tax. An expanded and fully funded tax credit for lower-income families. Fresh investments in disaster preparation and foundational public health. And significant new spending in early learning and child care. Those are among the elements of a proposed $59.2 billion, two-year budget Washington Senate Democrats unveiled on Thursday. Continue Reading Washington State Senate Democrats Unveil Budget Proposal: Big Boost In Spending, Capital Gains Tax
Washington’s improving fiscal picture isn’t an anomaly. A recent New York Times analysis shows that nearly half of states saw their revenues increase from April to December of last year. And many more experienced only slight declines. A key factor was federal aid that allowed even laid off workers to keep spending. Now, more federal money is headed to states from the latest stimulus package. Continue Reading Washington Revenue Picture Improves, Setting Up A Looming Battle Over State Budget
Even as the state of Washington’s revenue picture improves, majority Democrats in the Legislature appear committed to a course that will, one way or another, involve raising taxes this year. Not necessarily to balance a recession-era budget, but instead to reform a tax code they view as regressive and to address gaps and inequities exposed by the global pandemic. Continue Reading Washington State Dems Push For Capital Gains In A Year When ‘Tax’ Doesn’t Seem Like A Bad Word