In this March 12 photo, Washington state Senators work on the Senate floor at the Capitol in Olympia. (AP Photo/Ted S. Warren)

In this March 12 photo, Washington state Senators work on the Senate floor at the Capitol in Olympia. (AP Photo/Ted S. Warren)

What tax raising idea will win out in March budget madness?

Democrats, who control the state House and Senate, are set to release spending plans and revenue packages.

OLYMPIA — Let the budget games begin.

Lawmakers learned Wednesday how much the state is expected to collect in taxes during the next two-year budget cycle.

It’s a lot. A little north of $50 billion.

Next week, Democrats will reveal where they want to spend those dollars, why it’s not enough and why they need to raise more from new or higher taxes.

None of that should be a surprise.

While the economy alone will generate around $4.5 billion in new revenue for the next budget, Democratic leaders point out that most of it is already committed to covering school funding promises from the landmark McCleary court case.

There are other areas that they — and in some cases Republicans too — want to address like transforming the state’s mental health system, ending homelessness, building housing, expanding preschool education, making college tuition free, boosting special education funding, providing raises for state workers, clearing blocked fish passages and saving the Southern Resident orcas.

“Literally every dollar of new revenue that is expected to come into the state this biennium will go directly to basic education,” House Majority Leader Pat Sullivan, D-Covington, told reporters this week. “There is no money to make investments (in those other areas) unless we actually pass additional revenue.”

House Democrats will roll out their spending plan Monday with hopes of passing it a few days later. They also will release their package of revenue-raising ideas though it’s not certain when, or if, they will vote on them. Meanwhile, majority Democrats in the Senate also will be putting together a budget and tax proposal.

Republicans don’t think new revenue is needed. They contend the combination of rising tax collections, declining demand for some public services and a large reserve will generate enough dollars to tackle many of the challenges on the Democrats’ list.

But Democrats don’t agree. So what tax changes loom?

Here are a few that might show up. (If lawmakers are hungry for other ideas, there is a buffet of alternatives posted on the Department of Revenue website.)

REET — The flat real estate excise tax rate of 1.28 percent imposed on each sale of property would be replaced with a four-tier graduated rate. It would range from 0.75 percent on properties of lesser value to 2.5 percent for those multi-million dollar homes, offices and other businesses.

B&O rate hike — Democratic Gov. Jay Inslee suggested hiking the business and occupation tax rate for services by a full point. Democratic lawmakers are eyeing an increase up to 0.3 percent. As many as 175,000 businesses are covered unless lawmakers carve any out.

Capital Gains — The notion of taxing the capital gains from the sale of stocks, bonds and other assets gets talked about annually but never voted on. Many progressives think 2019 will be different. Inslee proposed a 9 percent rate. Lawmakers may stop at 7 percent.

Taxing opioids — Some Democrats want to add a business and occupation tax surcharge of 37 percent on those who warehouse and resell prescription opioid drugs. While this could wind up bringing in $50 million a year to the budget it might also drive up the price of some medications. Others suggest reducing a tax preference that allows them to pay a lower rate.

Vapor products — A new charge of 5 cents per milliliter of solution or other consumable substance could be on the table. Revenue would be steered into cancer research and public health. It’s not had a hearing nor an analysis of how much it would bring in. But a Republican sponsored it so it’s got to make the list.

SEBB and COLA — This idea does not raise money. It could reduce the need to raise as much. Under the McCleary fix, teachers are in line for a state-funded cost-of-living adjustment and enrollment in a new statewide health insurance program for school employees. Inslee’s budget assumed $498 million for a 2.1 percent COLA and $643 million for the School Employee Benefits Board. Some lawmakers wonder what if the COLA was suspended and those dollars were pledged to SEBB. Teachers would miss out on a state-funded raise but could wind up paying less for health insurance.

It’s a complicated equation.

Then again, budget writing is all about complicated financial and political equations.

Let the games begin.

Jerry Cornfield: 360-352-8623; jcornfield@herald net.com. Twitter: @dospueblos.


Talk to us

Please share your story tips by emailing editor@seattleweekly.com.

More in News & Comment

Courtesy of governor.wa.gov
Inslee extends pause on counties advancing phases to July 28

A spike in cases could cause hospitalizations and deaths to rise soon.

Puget Sound renters will need housing assistance

Nonprofits, activists are expecting greater need as workers are laid off.

GoFundMe screenshot
No suspects yet in West Seattle suitcase homicides

Families grieve deaths of Jessica Lewis of Federal Way and Austin Wenner of Kent.

Elected or appointed? King County weighs sheriff options

Voters could be asked to decide in November.

Courtesy photo
Bothell police officer dies in shootout

Update: Officer identified by police department

The Red Lion Inn at 1 South Grady Way in Renton is being used as temporary site to relocate individuals experiencing homelessness during the COVID-19 pandemic. Olivia Sullivan/staff photo.
Renton battles King County over temporary shelter at Red Lion Hotel

County officials believe emergency health order will supersede city’s move.

A train route that would shuttle people between Eastern and Western Washington could tie in with the proposed ultra-high-speed rail between B.C. and Portland. Photo courtesy RobertStafford/Pixabay.com
State receives King County to Spokane rail study

It would take about eight and a half hours to reach the Inland Empire from Puget Sound.

Bret Chiafalo. File photo
Supreme Court says state can punish WA faithless electors

Justices: Presidential electors, including Everett man, must keep pledge to back popular vote winner

Gov. Jay Inslee issued new guidance allowing the resumption of self-service buffets, salad bars, salsa bars, drink stations and other types of communal food sources in Phase 2. File photo
Buffets and salad bars back on the menu in King County

Gov. Jay Inslee has revised rules to allow self-serve food areas in Phase 2 of the state’s reopening.

Most Read