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Friends and Neighbors,

Even though one party controls the House of Representatives, the Senate and the governor's mansion, a solution to our state's $5.1 billion shortfall could not be agreed upon within the constitutionally-mandated 105-day regular session.  As a result, a special session – which could cost up to around $16,000 per day – will be needed in order for budget writers to finish their job.

I think this is absolutely unnecessary.  If we don't have money for higher education, for K-12 education, for social services or corrections, then we certainly don't have the money to pay legislators to stay overtime in Olympia.

Remember folks, it's not like our budget problems caught us off guard.  We've known about 90% of the $5.1 billion budget hole since last November. Budget writers should have been working on this problem then.  Coming into this session, we should have had the majority of the work done, with only a few items to clean up to get to the final budget.

Sadly, that has not been the case.  The supplemental budget passed by the Legislature early on in session didn't even close the budget gap between now and June 30 of this year!  It was a partial solution to a serious problem and it only made the budget hole for the next biennium worse because it pushed about $240 million of this year's “shortfall” into next year's “shortfall.”  This is simply an accounting gimmick – something I think the public is getting tired of.

What is even more concerning, the $5.1 billion 'hole' is after we consider that revenue is forecasted to be $3.9 billion MORE than in the current biennium.

While the Senate plans on calling all of their members back for the special session (and thus costing taxpayers more money in members' per diem), the House has elected to only have the budget negotiators in Olympia until a final budget deal is reached.  Once that happens, the rest of the Representatives will be called back to vote.

As one of the assistant ranking Republicans on the House Ways and Means Committee, and as chair of the state Economic and Revenue Forecast Council, it is likely I will be one of those frequently called to Olympia, but there is still question as to how much I will be a part of the negotiations as the special session progresses.  I'll keep you up to date as best I can over these next few weeks.

Eliminating out-of-state sales tax exemption would hurt SW Washington

As I've reported to you before, there is a move afoot to fund certain programs by eliminating tax incentives that have helped protect our economy; tax incentives that have protected jobs and that will be part of the formula that helps our state out of this recession.

In the final days of the regular session, there was a hearing in the House Ways and Means Committee to look at three hastily-proposed bills that deal with certain tax incentives.

The common denominator of all three of these bills is that they each eliminate the out-of-state sales tax exemption on retail sales here in Washington.  This would absolutely devastate our retailers in Cowlitz and Clark County.  It would lead to reduced shopping opportunities in our state, reduced employment in our state, reduced property tax and reduced B&O tax collections in the state – all with little or no increase in sales tax revenue.

The programs chosen to be funded include K-3 class size, help for seniors, and help for developmentally disabled persons — all of which should be a high enough priority to fund from the $32 billion we anticipate in revenue. If they are counting on new taxes to fund them, then they have been given the least priority in the budget. These are the kind of programs which should be a high priority — not at the bottom of our priorities as they have been in the House and Senate budget proposals.

I believe it is time we stopped looking for more tax revenue and started funding programs with the money already made available from taxpayers' wallets. It is what the voters told us to do.

 

My Bills

I had two of my bills recently signed into law by the governor.  I sometimes disagree with my colleagues in the Legislature – from both parties and from both chambers.  However, I always try to disagree without being disagreeable, and I always try to work with other members as much as possible.  I believe this has served our district well and has enabled me to guide my bills through the minefield that is the legislative process.

Both bills fix a catch 22 that taxpayers found themselves caught in.  The first bill is House Bill 1239If a contractor owes taxes and the Department of Revenue places a lien on ALL their property – including business and home – the contractor is unable to get bonded and insured to do more work, and therefore has no means to pay the back taxes.

My bill would allow the department to limit such a lien to a specific piece of property, thereby freeing up the contractor to go through the licensing and bonding process, which, in turn, will allow them to secure work to pay those back taxes.

The second bill, House Bill 1826, will help property owners who want to appeal their property values even if they haven't received an officia
l change in valuation. With the housing market in decline, too many homeowners are paying property taxes on homes that have gone down in value.  My bill would help property owners rectify this.

As always, I welcome your thoughts and concerns.  It is an honor and privilege to serve you in Olympia.

Sincerely,


Ed Orcutt

State Representative Ed Orcutt, 20th Legislative District
RepresentativeEdOrcutt.com
408 John L. O'Brien Building | P.O. Box 40600 | Olympia, WA 98504-0600
ed.orcutt@leg.wa.gov
360-786-7990 | Toll-free: (800) 562-6000