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Friends and Neighbors,

The remote, 2021 legislative session ended on Sunday evening after 105 days. The last week saw some major policies move forward and the passage of the three state budgets. Unless a special session is called, state lawmakers will not reconvene at the state Capitol again until January.

This was truly a session like no other. Like so many individuals and families, state lawmakers and the Legislature as an institution had to adjust to new technology and operate in a virtual environment – including committee hearings, House floor action, and voting by Zoom. It was not ideal, but we made it work.

The upside of this new system is it showed how the House can offer more opportunities for people to participate in the legislative process from their homes. That's a good thing. But I look forward to people returning to the Capitol campus for committee hearings, floor action, meetings, and rallies. Much was lost without the in-person interactions between state lawmakers and the public we serve.

State budgets

The most important responsibility of state lawmakers is to pass the three state budgets: operating, transportation, and capital. The Legislature did so last week. These are two-year state spending plans that begin on July 1, 2021 and end on June 30, 2023. Below are some details, including how I voted and why.

Operating budget | Senate Bill 5092 | More details

  • Funds: K-12 education, higher education, corrections, human services, and other government operations – including regulatory agencies.
  • Funded by: State taxes (sales tax, property tax, and B&O tax), federal funds, and other sources.
  • Spends $58.9 billion in state funds, an increase of $7 billion (13.6%) over the 2019-21 budget cycle.
    • Spends another $7 billion in federal stimulus funds from the American Rescue Plan Act of 2021.
  • Contains a new income tax on capital gains and a new $100 surcharge on recorded documents.
  • Transfers $1.8 billion from the rainy-day fund to the state general fund for ongoing operating costs.

I voted “no” because this level of state spending is unsustainable. I also believe Democrats did not need to raise taxes on anyone. Our state has plenty of revenue, not to mention a large infusion of federal funding. I also do not support taking money out of the rainy-day fund and putting it into another new account. I am going to call it what it is: A budget trick.

Capital budget | House Bill 1080 | Local projects

  • Funds: K-12 school construction, higher education facilities, mental and behavioral health facilities, Public Works Assistance Account, housing, and community projects.
  • Funded by: General obligation bonds, dedicated cash accounts, federal funds, and financing contracts.
  • Spends $6.3 billion, $3.9 billion from the sale of general obligation bonds.
    • $733 million for state's four-year higher education institutions.
    • $730.6 million for 2021-23 School Construction Assistance Program.
    • $512 million for community and technical college system.
    • $326 million to the State Broadband Office for broadband infrastructure projects, including $50 million in bonds to leverage other federal funding.
    • $200.7 million to begin construction of the behavioral health teaching hospital run by University of Washington.
    • $129 million from the Public Works Assistance Account to issue grants and loans to local governments.
    • $95 million in behavioral health capacity grants for community mental health services.
  • Leaves $82 million in bond capacity for the 2022 supplemental capital budget.

I voted “yes” because this is truly a bipartisan budget and process. It also makes important local investments in the 20th District and other projects across our state. My new seatmate, Rep. Peter Abbarno, picked up where his predecessor left off and did a great job as assistant ranking member on the House Capital Budget Committee and developing this budget this year.

Transportation budget | Senate Bill 5165 | More details

  • Funds: Capital projects, operating programs, and debt service.
  • Funded by: Fuel taxes, license fees, tolls, bonds, and federal funding.
  • Spends $11.8 billion.
    • $849 million for preservation and $520 million for maintenance.
    • $550 million for Washington State Patrol, including an additional trooper class.
    • $541 million for operating costs and $505 million for capital costs for Washington State Ferries.
    • $374.5 million for Department of Licensing.
    • $224 million for Transportation Improvement Board.

This is the state budget I am most familiar with, as a member of the House Transportation Committee and former ranking member. I voted “no” because of concerns I had with some of the priorities and the failure to implement the $30 car tabs which voters demanded via initiative. Worse yet, when I offered an amendment to implement $30 car tabs, the majority party would not even allow debate or consideration of the amendment. While I appreciate the bipartisan efforts than went into crafting this budget and acknowledge the challenges that budget writers faced, I felt your voice deserved to be heard.

Income tax on capital gains | Senate Bill 5096

Senate Bill 5096, which will impose a 7% capital gains tax beginning on January 1, 2022, passed the Legislature in the last week and will be signed into law. As I have shared with you before, this new tax is unnecessary, unpopular, and likely unconstitutional. It's a foot in the door to a state income tax that voters have rejected numerous times.

Not only did the majority party refuse to send it to voters via referendum, they inserted a form of an emergency clause or “necessity” clause, which they tried to hide in the text of the bill rather than clearly display by inserting it at the end where one normally is included. I made multiple attempts to have this clause removed and to add a referendum clause to assure you had the chance to make the final decision.

As the ranking member on the House Finance Committee, I provided the House Republican closing remarks on this bill on Saturday. You can watch my House floor speech here.

Cap-and-tax | Senate Bill 5126

Senate Bill 5126 will establish a new program for greenhouse gas emissions to be implemented by Department of Ecology – which they call “cap-and invest.” I have also seen it called cap-and-trade, but I more appropriately call it cap-and-tax. Whatever you want to call it, it's a bad idea.

We hear a lot from the majority party that our state's tax system is upside down and regressive. And then they turn around and pass this incredibly regressive policy. It will raise the price of gas, food, goods, and heating on those who can least afford it. It will also hurt small businesses and make our state's business climate less competitive.

Everyone cares about air quality. And I have voted for many balanced environmental bills over the years. But this policy is an ineffective way to reduce carbon emissions and will have little effect on state emissions – much less on a global scale. It also mirrors I-1631 from 2018, an initiative that voters overwhelming rejected. The majority party is ignoring the will of the voters on this issue like they ignored what voters had to say on $30 car tabs.

Low-carbon fuel standard  | House Bill 1091

If you can believe it, cap-and-tax wasn't even the most regressive policy passed by the majority party last week. That honor goes to House Bill 1091: The low-carbon fuel standard mandate. Long sought by the governor, the bill authorizes the Department of Ecology to create a clean fuels program (by agency rule) to reduce the carbon intensity of transportation fuels. Another unaccountable state bureaucracy and another way the Legislature ceded legislative authority to a state agency.

More importantly, it, too, will be regressive. It will increase the costs of gas, diesel, and goods, yet will not create any new revenue for transportation projects. None. It will also do very little to improve air quality in our region.

A low-carbon fuel standard, cap-and-tax, and eventually a state gas tax increase to fund a new transportation revenue package will greatly increase what you pay at the pump, with estimates ranging from 55 cents to $1.05 more per gallon. Many individuals, families, and small businesses cannot absorb these additional and burdensome costs.

Ending on a positive note

What I have outlined above is disconcerting. I truly believe the majority party overreached this year and will ultimately hurt many of the people they claim they want to help.

But the news is not all bad. Despite the content and passage of the bills above, a vast majority of bills that pass off the House and Senate floors do so with strong bipartisan – if not unanimous – support. Some bills offer minor changes to statutes, while others will have a major impact on our state.

There were some big bipartisan successes. I mentioned the capital budget above. State lawmakers also came together to pass wildfire prevention and forest health legislation, without raising taxes to do it. The Legislature also funded the Working Families Tax Credit for the first time since it was passed 13 years ago. I voted for this tax relief for working families, though I continue to push for more immediate and broad tax relief to benefit overburdened taxpayers in our state. There were also some important steps taken to expand rural broadband to rural residents and make changes to our state unemployment system to ease the impacts on employers. So, we did get some good things done in Olympia.

Contact me

While the legislative session is over, I am your state representative year-round. If you have concerns with state agencies or want to begin work on legislative changes for a future session, I welcome you to contact me anytime. Please email, call, or send me a letter. I look forward to hearing from you.

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