2023 legislative session •

In a 7-2 ruling today, the Washington State Supreme Court reversed a lower court decision and upheld the Democrats’ capital gains tax as constitutional. I discuss this issue in my video update.

In a statement earlier today, Rep. Drew Stokesbary said: “Today’s ruling is an unfortunate loss for businesses and employees across the state. I’m disappointed a majority of the Supreme Court justices ignored the common-sense fact that is plain to Justices McCloud and Johnson, the IRS, and every other state in the country – capital gains are income. By endorsing the Legislature’s word games, today’s ruling provides a blueprint for future tax increases authored by clever legislators who now know they can circumvent the state’s constitutional tax limits by merely labeling any new tax as an excise tax.”

I share these concerns. While this new tax may not reach you today, it could be expanded and find you and other taxpayers in the future. The door is now open with today’s ruling.

This policy was a priority for the majority party in the 2021 legislative session. When the bill to establish this new tax was debated, House Republicans argued it was unnecessary, unpopular and unconstitutional. I stand by these arguments. You can watch some of our floor debate highlights here.

The issues of affordability and taxes highlight differences between Republicans and Democrats. House Republicans will continue to fight for taxpayers and oppose policies that add to the financial burdens of Washingtonians.

Revenue forecast

We have reached the point in the legislative session when state budgets take center stage. The stage was set Monday with the revenue forecast. This report on state tax collections revealed that revenues, compared to the November forecast, increased by $194 million for the current 2021-23 budget cycle. However, revenues decreased by $483 million for the upcoming 2023-25 budget cycle.

Rep. Ed Orcutt, our member on the Economic and Revenue Forecast Council, was asked by a reporter how the numbers will impact the budget. You can watch his answer in this video. He was also quoted in this NW News Network story: “It’s a question of spending – are we going to continue to ratchet up spending or are we going to stay on more of a consistent trajectory and maybe give taxpayers a little bit of relief?”

I mentioned Drew above. In our Republican media availability Tuesday, he characterized the revenue forecast as “disappointing but not surprising” and discussed its impact on the budget. I encourage you to watch all of Drew’s comments in this video. I will reiterate a point he made: House and Senate Republicans will continue to advocate for responsible, sustainable budgets.

State budgets

Senate Democrats released their operating budget proposal at a news conference yesterday. You can find their materials here and related stories below:

In a statement, Senate Republican Leader John Braun described the plan as bipartisan and praised its investments in special education and helping students recover from learning loss. These issues have been priorities for Republicans this year.

House Democrats will release their operating, transportation and capital budget proposals early next week. The processes for the transportation and capital budgets have been bipartisan and collaborative, and I am hearing good things about both state spending plans. The process for the operating budget has been, and continues to be, partisan and closed. We will have to wait and see what is released. I will share more information next week.

You can find our Week Ahead publication here. For more legislative news and views, visit The Ledger.

Sincerely,

Rep. J.T. Wilcox
House Republican Leader
(360) 786-7912
JT.Wilcox@leg.wa.gov