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March 20, 2020

Friends and Neighbors,

The 2020 legislative session ended just after 8 p.m. on Thursday night, March 12. The last bill passed by the House will provide $175 million from the Budget Stabilization Account (also referred to as the rainy day fund) to assist with the coronavirus response in our state. Another $25 million of the General Fund will go toward an unemployment fund. Our state is also expected to receive federal funds to help combat coronavirus.

At the beginning of the legislative session, our economy was strong, tax collections were at a record high and by February our state had a $2.4 billion surplus. As the chair of the state Economic Revenue and Forecast Council, I have had a front row seat to our state's economy and revenue. Then, about three weeks ago, the coronavirus situation began to escalate – necessitating that our state take drastic action to slow its spread.

Though I am very concerned about the impacts on citizens and employers in our state, I am being careful to not second guess the steps the governor has taken so far, but do feel more background information on the reasons for these actions would help citizens and policymakers better understand the reasons for those actions. And, it can help us better determine if certain sectors of the economy need to be shut down as well as how others can adjust to minimize impacts to employers and employees.

Coronavirus has created a lot of uncertainty from public health, economic, and state finance perspectives. In my time in the Legislature, our state has endured a recession brought on by 9-11, the aftermath of a major earthquake, a large landslide, major floods, and The Great Recession. But none of these have presented the uncertainty brought by the coronavirus. I know our communities will pull through this, but it's going to take more than just the actions of government. We need our health care community, private sector, churches and volunteers all working closely together to help those most in need.

Republicans and Democrats in the Legislature are united and working closely together to address this problem. The funding was a first step. If more resources need to be appropriated, or if other additional steps need to be taken, the Legislature will not hesitate to reconvene and do what needs to be done for Washingtonians.

Coronavirus (COVID-19) | Information and Resources

If you would like updates on coronavirus, here are links to websites that are good resources for information:

• Washington House Republicans: Coronavirus (COVID-19) | Information and Resources
• Washington State Department of Health (DOH): 2019 Novel Coronavirus Outbreak (COVID-19)
• Governor's Office: Coronavirus Disease 2019 (COVID-19) Information and Updates

Additionally, the DOH also has a call center which is open from 6:00 a.m. to 10:00 p.m., seven days a week: 1-800-525-0127.

Video update

I taped my video update last Friday – the day after the legislative session ended. I discuss coronavirus, some bad bills that were stopped, supplemental state budgets, and other outcomes of the 2020 legislative session. You can watch it here.

Supplemental operating budget

In my last email update, I expressed my concern with the House supplemental operating budget that passed on February 28. The partisan proposal spent too much, saved too little and offered no tax relief. It was an irresponsible, unsustainable approach.

In the days that followed, Republicans cautioned budget writers to not go down this road and to scale back their spending plan. My House Republican Leader J.T. Wilcox, in a March 5 op-ed in The Seattle Times, challenged budget writers to rethink their fiscal approach in final budget negotiations.

I am happy to report that budget writers did listen to Republicans and scaled back their spending plan, though not as far as they should have given the economic storm clouds that are forming. But I do want to acknowledge that they moved closer to the Republican position. Time will tell what the next nine months hold in terms of the strength of our state's economy and tax collections. No one wants to make cuts that hurt those most in need. And Republicans don't ever want to have to raise taxes – especially in an economic downturn.

Here are some other details on the supplemental operating budget:

• Increases 2019-21 budget cycle spending to $53.5 billion ($53.1 billion from Near General Fund-Outlook and $390 million from the Workforce Education Investment Account).
• Spends about $1.5 billion on new policy items (new or expanded state programs) over the next four years.
• Leaves an ending fund balance of $859 million in the Near General Fund-Outlook and $2.7 billion in the Budget Stabilization Account (rainy-day fund) by the end of the 2021-23 budget cycle.
• State spending is now set to increase by 73% since 2013.
• Learn more: http://fiscal.wa.gov/BudgetOSWSuppGraphic.aspx

Supplemental transportation budget

The supplemental transportation budget is probably the best example of a bipartisan success this legislative session. Republicans and Democrats worked closely from day one to draft a plan that would accommodate voter-approved $30 car tabs while not making any cuts that would hurt vulnerable populations or jeopardize important transportation projects. After a lot of hard work and negotiations, that's exactly what we were able to accomplish.

We will have transportation funding issues to address in the future, but for the time being our state has a workable spending plan for the rest of the budget cycle – one which honors $30 car tabs. And our state should be proud of it.

• Learn more: http://fiscal.wa.gov/BudgetTSWSuppGraphic.aspx

$30 car tabs

On the last day of the legislative session, a judge also signaled that I-976 ($30 car tabs) would likely survive legal challenges and take effect. This was welcomed news to me and others who respected the will of the voters and pushed for legislation to implement $30 car tabs – to erase all legal uncertainty.

Supplemental capital budget

The supplemental capital budget was also a bipartisan process and outcome. While the largest investments in this two-year budget are always made in odd-numbered years, state lawmakers were able to identify and fund new opportunities this year. Here are some of the highlights:

• $39 million for remedial action grants and stormwater assistance to clean up contaminated sites.
• $28.2 million for children's mental health services.
• $19.5 million for upgrades to schools at high risk during earthquakes, and other investments in smaller, rural schools.
• $7 million for early learning facilities and community projects that add childcare capacity.
• Learn more: http://fiscal.wa.gov/BudgetCSWSuppGraphic.aspx

Saying goodbye to Rep. Richard DeBolt

My seatmate, Rep. Richard DeBolt, played a leading role in crafting the supplemental capital budget. Richard announced in February that he is leaving the Legislature at the end of his current term. His leadership on this committee and in the Legislature will be missed.

We honored Richard with a House Resolution on the last day of the legislative session. You can watch the speeches, including my remarks, here.

High-profile bills

A few high-profile bills were still under consideration in the last week of the legislative session. Here is an update on them:

House Bill 1110 | Establishing a low-carbon fuel standard.

• This bill passed the House two years in a row, though I voted against it both times. I am glad that Republicans and moderate Democrats in the Senate were able to stop it. We all care about the environment. And I have voted for several, common-sense environmental bills in the past. But the low-carbon fuel standard is an expensive and ineffective attempt to improve air quality and reduce carbon emissions. It would also hurt those who can least afford it. I expect similar proposals to be back next year.

Senate Bill 5339 | Repealing the death penalty.

• For two years in a row, this bill passed the Senate but did not move forward in the House. I expect proponents of this idea will continue to push for it in the future.

Senate Bill 6690 | Increasing the aerospace business and occupation tax

• It is not very often that a company comes to the Legislature and asks state lawmakers to raise its taxes. But that's exactly what happened this year when Boeing asked the Legislature to raise the aerospace B&O tax rate so it could resolve an international trade dispute and prevent possible European tariffs. I voted against this bill because I don't like the idea of our state tax policy being determined by the World Trade Organization or the European Union. Since we are the only state required to change its incentives for aerospace, I am concerned it will make Washington less competitive in aerospace manufacturing. And, this will negatively impact many small aerospace (parts) manufacturers in our state.

Senate Bill 5323 | Banning single-use plastic bags

• Beginning January 1, 2021, stores will be prohibited from providing customers a single-use plastic bag – unless the bag meets certain requirements for recycled content. I voted against this bill because I think it's government overreach as the state now REQUIRES retailers to charge a price set in the legislation – and then the state taxes the sale of the bags! That seems wrong in at least three different ways.

Contact me

While our state has a part-time Legislature, I am your state representative throughout the year. I am here to listen, receive your communications and assist you with state government, if needed. I am always just an email or call away. I welcome you to contact me. And I will do my best to respond in a timely manner.

Sincerely,

Ed Orcutt