Friends and Neighbors,
Just a month remains in the legislative session. Today was policy committee cutoff – opposite house. This means all bills from the opposite chamber needed to pass out of their respective committees, except for bills in House and Senate fiscal committees. This is one of the self-imposed deadlines for the Legislature to keep the process moving and on track. The next deadline is fiscal committee cutoff – opposite house on April 2. But, bills which affect state revenues or state spending remain eligible for consideration until the final day.
This week also saw state budgets (operating, transportation, and capital) released by the majority party in the House. We received briefings on these state spending plans and are expected to vote on all of them Friday and Saturday next week. While it appears the capital budget will again include bipartisan collaboration, it looks like there could be significant differences between Democrats and Republicans on the operating and transportation budgets. And there is still the question if a new tax package may advance this year and what any package would look like. I will share more information in my next email update.
State revenue forecast
The state revenue forecast was released on March 17 and it provided more good news for budget writers. In comparison to the November state revenue forecast, Near General Fund revenue increased by $1.34 billion for the 2019-21 budget cycle and increased by $1.95 billion for the 2021-23 one. In total, a $3.29 billion increase over the four-year outlook. This basically erases the losses we saw since the February 2020 forecast upon which supplemental budgets were written to fund through June 30 of this year and for projected revenues for the next two-year budget cycle. You can watch the Economic and Revenue Forecast Council's meeting at this TVW link.
What this shows is our state tax collections have been resilient and recovered despite COVID-related economic challenges over the last year. This news, coupled with the large amount of federal funding on the way, provide budget writers with more than enough resources to fund state priorities – without raising taxes. As I said in a statement last week, I believe one of these priorities should be helping those who are struggling the most. I also discussed the state revenue forecast, operating budget, and taxes in my recent video update.
Safely reopening schools
My Republican colleagues and I continue to push to safely reopen schools. And we appreciate that Gov. Inslee has finally come around to our position, although it took a while. He now understands what Republicans have been saying for months: Our kids are experiencing mental health challenges and falling behind socially, emotionally, and academically.
Our schools know how to reopen safely for in-person instruction and have the resources to do it. With the updated guidance from the Centers for Disease Control and Prevention (CDC) last week saying that three feet between students in classrooms is adequate physical distancing, and the governor announcing yesterday he would adopt this guidance for schools in our state, there should not be any more barriers to reopening classrooms. In fact, this should accelerate the move to more in-person instruction. It's time to get teachers and students back in the classroom.
Update: Income tax on capital gains
In my last email update, I discussed the income tax on capital gains proposal – Senate Bill 5096. The controversial measure was heard in the House Finance Committee on March 15. While it has not been scheduled for an executive session yet, I am concerned that we will see it scheduled for a committee vote soon as it is assumed in the House operating budget proposal.
This legislation is unnecessary, unpopular, and likely unconstitutional. And I continue to believe it's a foot in the door to a state income tax. I shared my views with reporters last week at our weekly Republican media availability. You can watch the entire event here.
Designating Washington state as a Purple Heart State
I prime sponsored a bipartisan measure this year that would designate Washington state as a Purple Heart State that honors people who have received the Purple Heart. House Bill 1250 would also authorize agencies to develop signs recognizing this designation and create three accounts in the State Treasurer's Office where gifts and donations received by the agencies must be deposited. The legislation passed the House unanimously and advanced out of the Senate State Government and Elections Committee on Wednesday. I'm hopeful it will be passed and signed into law.
I will do my best to keep you updated in the homestretch of the legislative session. I welcome your input on the decisions being made by your citizen Legislature. Please do not hesitate to email, call, or send me a letter.