Dear Friends and Neighbors,

The first 30-day special session has ended and the Legislature still has not passed an operating budget. The governor called a second 30-day special session last Wednesday. By law, he can only call 30-day special sessions. However, we need an operating budget by the end of June, when the state’s fiscal year ends.

How we got here

How we arrived in a second special session without a budget is rather simple. The Democrats want to implement or increase taxes, and the bipartisan Senate Majority Coalition Caucus wants some reform bills if new tax revenue is going to be on the table. This budget could have been passed long ago. If you have read my e-mail updates or listened me on the radio, you have heard me say the state has $2 billion more in tax revenue for this budget than the last. We should have been able to pass a balanced budget with a 6.6 percent increase in tax collections in the regular session…and not be wasting taxpayer money on special sessions. Since I have been serving in Olympia, we have had much more difficult budget situations. This should not be one of them.

The budgets

House Democrats did offer a new budget proposal at the end of the first special session. It passed the House by a vote of 53-35. All Republicans and one Democrat voted against House Bill 1057.

Their latest proposed budget does make some concessions, particularly backing off on the permanent extension of the Business and Occupation (B&O) surtax on service businesses. However, they are still leaving it in place for some industries. Their latest proposal also removes the sales tax exemption for non-residents (this will have a huge impact on our border counties), and it removes the sales tax exemption on bottled water – a tax voters turned down in 2010. These taxes may not seem significant to most, but I still believe now is now the time to be raising taxes. There are still more than 57,000 people out of work since the start of the recession five years ago. It also goes back to our tax collections, they are up almost 7 percent. Why are we talking about raising taxes?

My other concerns with the House majority budget include:

It is impossible to have a sustainable budget when you are using gimmicks, such as sweeping accounts and one-time money shifts like the education apportionment and taking the PWTF monies. The most telling part of their budget is that it spends less on education than any of the other budget proposals we have seen and still raises taxes. They are clearly putting students, teachers and our education system up against tax increases. House Republicans have been saying since Day One, let’s fund education first, then if taxes are needed to fund other priorities then the majority should bring it up for a discussion. Raising taxes, particularly holding out school funding to do so, should not be an option.

The Senate Majority Coalition Caucus budget, also passed a new version of their budget over the weekend – Senate Bill 5034. It has not changed much from the bipartisan budget they passed in the regular session, the difference is they are asking for reform legislation to be passed as part of a budget agreement.

House Democrats have dropped their original tax increase plan from $1.3 billion to about $525 million. Senate Republicans initially had a list of 33 reform bills they wanted on the table and they are now requesting just three.

What’s next

Unfortunately, we are now seeing a lot of finger-pointing and threatening terms being thrown around such as “fiscal cliff” and “government shutdown.” The governor is the biggest offender. The Washington State Wire article “Inslee Abandons Mediator Role as He Calls Second Special Session – Blames All Problems on Republicans” provides a good breakdown of what has happened in the last few days.

The “fiscal cliff” and “government shutdown” rhetoric really is unnecessary and has only inflamed the budget debate. We don’t need the Washington D.C. mentality as part of our state government. The federal government took about five years to pass a budget, they have stalled on nearly all major issues and the things we are finding out about how their agencies have been functioning is downright frightening. We do not need to be linking our state to D.C. politics in any way, shape or form and that goes for rhetoric, too.

The governor now seems to have a sense of urgency to resolve the budget debate. Where was the urgency when he waited two weeks before calling the first special session? Why hasn’t his office been more involved in bringing people to the table to work out their differences – something both former governors Gary Locke and Christine Gregoire were very good at. Instead, he is fanning the flames and pointing fingers.

Death tax reappears

The biggest black eye of the session will be the shameful execution of House Bill 2075, or what is referred to as the Bracken Bill. It reinstates the estate tax on married couples’ assets and does so with a retroactivity clause. That means families, who have deceased family members, will have to pay millions in taxes to the state Department of Revenue.

You will hear a lot of political rhetoric surrounding this issue, but the main and most significant point is this measure changes the rules retroactively so the state do not have to provide refunds to those taxpayers who followed the rules that were upheld by the Washington State Supreme Court. Not only does this set a dangerous precedent, but I believe it is unconstitutional and will be struck down by the same court that upheld the law. That will mean we will still owe the refunds plus interest and court and legal costs. It also means the budget will have to be adjusted to reflect this loss in the future. It is shameful for any legislator to support this measure. 

How does it end?

It is important to not buy into the hype. It is possible to live within our means, fulfill our obligation to fully fund education and not raise taxes. I am hopeful we will get there in the next couple weeks. We are not going over a fiscal cliff. The tax revenue is there. The negotiators need to meet in the middle. That means some reforms will need to be considered by House Democrats if they expect the Senate to agree to some new revenue. Or, maybe all the tax revenue bills go away along with the reforms and then an agreement is reached.

There is a revenue forecast update on June 18 that may show the state has a little more money coming in. That could help the negotiations but not enough that it should make a difference in the final budget.

Satellite TV tax update

I received many emails concerning a proposed satellite television tax. When House Democrats released their last operating budget proposal it included about $50 million in additional revenue from a satellite tax within a telecommunications services reform bill House Bill (HB) 1971.

We were anticipating an amendment to HB 1971 to include a new tax on satellite service. However, the amendment never appeared. Both HB 1971 and HB 1057 were voted out of the House without the proposed tax. However, while the House Democrats reconfigured their budget to exclude new revenue from a tax on satellite services, as we mentioned we are in a new session so everything will have to be voted on again and is subject to being amended.

Please let me know if you have any questions.

Sincerely,

Cary Condotta

State Representative Cary Condotta
12th Legislative District

E-mail: cary.condotta@leg.wa.gov
Web site: www.houserepublicans.wa.gov/condotta

Olympia Office (January-April)
425B Legislative Building – P.O. Box 40600 | Olympia, WA 98504-0600
(360) 786-7954 or Toll-free: (800) 562-6000

District Office (May-December)
3024 G.S. Center Rd. Suite “C”
Wenatchee, WA 98801
(509) 664-1274

 

CONTACT: John Sattgast, Broadcast Coordinator – (360) 786-7257 / Studio – (360) 786-5046

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(Voice cut:  Manweller-SeattleCompost-Clip2.mp3 – Run time :18 seconds – Out cue: . . .to tell them.)

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Dear Friends and Neighbors,

The first special session of the Legislature adjourned June 11 and the governor called us back for a second special session that began June 12 at 9 a.m. to finish our work on the state operating budget.

The stalemate on the budget boils down to two issues: government reforms and tax increases. Tax collections are expected to be up by $2 billion. The Senate is asking for job-creation, education and government spending reforms as part of the final pieces of the budget negotiations.

We continue to work through the process. Negotiators are talking non-stop and, I believe, in good faith. I ask that you focus on the positive efforts that are being made and not be drawn to the drama of a “government shutdown.” My colleagues on both sides of the aisle and I are determined to get this done

Below is a brief update on the status of the Legislature and a little bit about where we go from here.

In service to you,

Susan Fagan

First special session over, second special session called by governor

Like you, I am disappointed with the need for yet another special session of the Legislature – the eighth in three years! As I mentioned above, those at the negotiation are working toward a balanced and sustainable budget and common-sense policies that encourage private-sector job creation.

There has been a lot of talk about a state government shutdown, but this D.C.-style scare tactic only serves to derail good-faith negotiations, not bring sides together. We will not shut the government down and I am very concerned this talking point is scaring those most reliant on state government services, including schools.

One issue that I think we should keep in mind is that the state is projected to bring in an additional $2 billion in tax collections – that’s a 6.6 percent increase over the 2011-13 budget, so I am very concerned about asking more from taxpayers. You are already contributing $2 billion more to the state, not to mention additional billions of dollars to the federal government.

I will continue to work from my end to ensure we prioritize state spending on K-12 education, public safety and services for the most vulnerable.

Two complex bills passed this week

The state estate tax “fix” legislation: The Legislature approved and the governor signed a bill that would impose a retroactive death tax that allows the estate state to collect taxes back several years. House Bill 2075 would allow the state to retroactively collect the death tax from the estates of married couples who used a specific type of trust to transfer assets from one spouse to the surviving spouse without paying the state estate tax.

This bill was put forward as a way to correct a technical glitch in the law that allowed married couples to avoid the state estate tax while single people could not avoid it. There is an excellent article on this issue that you can read here. I voted against this bill because I have concerns about changing the law retroactively and I fear that this policy of going back to collect taxes that were not due under the law as it existed could lead to another lawsuit against the state.

Model Toxics Control Act (MTCA): The Legislature also approved Senate Bill 5296 and the governor signed it into law in the early hours today, June 14. The Model Toxics Control Act (MTCA) was created by a 1988 initiative and funds for the account are generated from the Hazardous Substance Tax, which generated $352 million over the 2011-13 biennium.

This legislation put in place stricter controls with these funds to ensure they are being effectively used on environmental cleanup projects around the state. Over the years, funds from this account have been used to pay for a myriad of programs, such as natural yard care programs, food and grass recycling initiatives as well as other programs unrelated to specifically cleaning up hazardous sites around the state. This is a bill I supported because it will ensure we use dedicated money more wisely so we can complete more crucial environmental projects with the dollars we have. 

What is next?

Budget leaders and legislative leaders are continuing to meet to find common ground on spending. We began passing budget-related bills Thursday and will continue until we have all the necessary bills over to the Senate for consideration. At that point the Senate will have to act on what I hope are negotiated bills that receive strong support.

We can fund education, including the additional McCleary enhancements within current tax collections. I believe it will be important to continue discussions about any new and higher taxes over the interim when the public will have ample time to share their opinions.

I have confidence we can finish our work by or before June 30. Please let me know if you have additional questions.

State Representative Susan Fagan
9th Legislative District

E-mail: susan.fagan@leg.wa.gov
Web site: www.houserepublicans.wa.gov/fagan

406 John L. O’Brien Building – P.O. Box 40600 | Olympia, WA 98504-0600
(360) 786-7942 or Toll-free: (800) 562-6000

 

• strip millions out of the Public Works Assistance Account, thereby robbing funds from local governments;
• threaten our high-paying local jobs by increasing taxes on our refineries; and
• increase the cost of prescriptions for the sick and elderly.

• A B&O tax increase on travel agents and tour operators. (In Washington, the travel agency industry consists of 335 retail locations that contribute 2,204 full-time jobs and $111 million in direct economic impact to the state.  The vast majority of Washington travel agencies are small businesses – 73 percent of them employ fewer than five people and 90 percent employ fewer than 10.)
• A B&O tax increase on resellers of prescription drugs. (This would especially hurt our senior citizens.)
• A sales tax increase on bottled water. (Voters repealed this tax in November 2010.)
• Eliminating the sales tax exemption for non-residents. (This would discourage people from shopping in our border counties.)
• Repealing an extracted fuel tax. (This would especially hit our state’s refineries that employ people in Whatcom and Skagit counties.)
• Tax increases on research and development.
• Residential telephone tax increase..
• Retroactive death tax

Dear Friends and Neighbors,

Since I last wrote you, the first special session has come and gone, and the governor called us back into a second special session, which began Wednesday, June 12. The challenge remains adopting a 2013-15 budget that balances $2 billion more in revenues within expected caseloads, while increasing our constitutional obligation to education as required by the state Supreme Court. As I wrote in my monthly column in the Yakima Valley Business Times last month, there are two approaches to the budget coming from the House and Senate: passing tax increases to pay for education, and paying for education within existing revenues.

Recently, the House Democrats and Senate coalition each introduced new budget proposals. The House Democrats dropped their initial $1.3 billion tax increase proposals to $595 million. They say these tax increases are needed to fund education. However, the Senate Coalition budget funded education with $1.5 billion more than the last budget, without holding our classrooms hostage to a tax increase. The Senate appears agreeable to a tax increase on out-of-state shoppers and responding to two Supreme Court cases that will result in revenue. The Senate wants to fund education first in the general fund, then use the new funding for social programs.

Though there has not yet been a formal agreement, both of these proposals indicate a willingness to negotiate and pass a budget. Despite what you may hear from the governor, a government shutdown is not imminent. Unlike Washington, D.C., we are constitutionally required to pass a budget in Olympia. Never before has the state government shut down due to a lack of agreement on a budget, and it is not necessary now. I have confidence the Legislature can and will find agreement in time for the end of the fiscal year, June 30.

I will continue fighting for your jobs, your families and your hard-earned tax dollars. Please don’t hesitate to contact my office anytime with questions, comments or concerns. It’s an honor to represent you in Olympia.

Sincerely,

Bruce Chandler

State Representative Bruce Chandler
15th Legislative District

E-mail: bruce.chandler@leg.wa.gov
Web site: www.houserepublicans.wa.gov/chandler

427B Legislative Building – P.O. Box 40600 | Olympia, WA 98504-0600
(360) 786-7960 or Toll-free: (800) 562-6000

 

Dear Friends and Neighbors,

Yesterday the governor called the Legislature into a second special session. What was supposed to last 105 days is now in its 137th day. Since the first special session began, I have traveled from Spokane to Olympia on three separate occasions. While both the House and Senate have offered compromises for the 2013-15 budget, there is still no formal agreement. Why, is up for political debate.

The most recent House Democrat budget dropped their initial $1.3 billion tax increase proposals to $595 million. They say these tax increases will pay for education. The most recent Senate Coalition budget moved from a no-new-taxes approach to accepting $356 million in tax increases or changes. The Senate wants to fund education first, then use the tax increases for social programs. Both sides are willing to compromise, and I have the utmost hope they can come to an agreement before June 30, the end of our state’s 2011-13 budget.

You may have heard rumors of a government shutdown. While the governor may be planning ahead if the Legislature does not pass a budget, a government shutdown does not have to happen if we stay focused on the budget. Unfortunately, there have been many distractions since January that created divisiveness and wasted time, including universal background checks on firearm sales, an abortion mandate, climate change legislation and much more.

The House also recently voted on a bill dealing with the estate tax, also known as the “death tax.” The legislation aims to make couples and individuals equally subject to the estate tax, approved by voters. However, it would also adopt this change retroactively, meaning families who are expecting a tax refund will no longer receive it because the state will keep that money. I don’t think this is fair, so I voted no.

While the rhetoric goes back and forth, I want you to know where I stand. I believe we can pass a sustainable budget that prioritizes our constitutional obligation to education first, and also protects our fragile economy. The education of our children and protection of taxpayers do not have to be mutually exclusive. Our state is still expected to bring in $2 billion more in this upcoming budget without raising taxes – this can provide what is needed to increase education funding as required by the state Supreme Court, and population growth. Call me an eternal optimist, but Olympia is not Washington D.C. – we can and will find agreement on a responsible budget that is fair to Washington’s children, families and hardworking individuals.

TV tax not on the table

Many of you have written to me about the proposed “TV tax,” or satellite tax. The House Democrats’ latest budget proposal did include about $50 million with a satellite tax. However, when the budget and House Bill 1971 which was assumed to include the satellite tax passed the House, neither included the tax. So for now, it appears as if public pressure has again won the day and this will not be included. I would not and will not support this, as it unfairly targets people who may not have access to cable TV in more rural areas like Cheney.

I’ll keep you updated as things move forward here in Olympia. Please feel free to contact my office – even when I have to travel to Olympia, my legislative assistant, Josh, will still be available to assist you in Spokane. Our contact information is below. Thank you for allowing me to serve you.

Sincerely,

Jeff Holy

State Representative Jeff Holy
6th Legislative District

E-mail: jeff.holy@leg.wa.gov
Web site: www.houserepublicans.wa.gov/holy

Olympia Office (January-April)
405 John L. O’Brien Building – P.O. Box 40600 | Olympia, WA 98504-0600
(360) 786-7962 or Toll-free: (800) 562-6000

District Office (May-December)
901 N Monroe, Suite 354 | Spokane, WA 99201
(509) 443-3331