Washington Legislature to open next week with new taxes, budget deficit looming

Next week, Washington state legislators will meet in Olympia for a 105-day legislative session. As the new fiscal cycle begins on July 1, leaders gave a sneak peek at their objectives as they prepare to write legislation and budgets.

House and Senate leadership, budget and transportation officials, outgoing Governor Jay Inslee, and Democratic Gov.-elect Bob Ferguson were among five panels of leaders who discussed new recommendations for the coming year and how they want to close a huge budget deficit.

Four things to remember from the legislative preview are as follows:

Republicans and Democrats generally agree that more money should be spent on police.

Ferguson, in keeping with his campaign pledges, is proposing a $100 million investment over two years for the state’s hiring and retention of law enforcement personnel. He says he finds it unacceptable that Washington has the fewest law enforcement officers per capita. His budget proposal was made public on Thursday.

Republicans concurred on Thursday.

The Legislature must take action to address Washington’s serious public safety situation, stated House Minority Leader Drew Stokesbary, a Republican from Auburn.

In order to boost recruiting around the state, Stokesbary noted, Republicans will be introducing laws this year that will finance police personnel in local governments.

Sen. Manka Dhingra, D-Redmond, and Sen. Jeff Holy, R-Cheney, have already prefiled a bill in the Senate. Ferguson said on Thursday that he was excited to collaborate with Holy on the bill.

Legislators and the public appear to agree that more officers are needed. A Cascade PBS/Elway survey, which was presented at the event by pollster H. Stuart Elway, was released Thursday. It found that 73% of respondents supported ideas to boost money for local governments to recruit more police. Republicans, Democrats, and independents are all included in that figure.

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New taxes are being discussed, but it’s unclear how big of an impact they will have.

As Democrats and Republicans discuss how to address the state’s projected $12 billion to $16 billion deficit over the next four years, taxes will be a hotly debated topic this session.

Ferguson, who opposes a wealth tax in contrast to some of his Democratic colleagues in the Legislature, stated on Thursday that he is focused on efficiency and cost reductions rather than revenue as the session begins.

Senate Majority Leader Jamie Pedersen, D-Seattle, said Democrats have not yet prioritized or rejected any tax measures. Senate Democrats are mulling a wealth tax and a statewide tax on high earnings akin to Seattle’s JumpStart tax, according to a missent email last month.

Pedersen hinted that further possibilities might be on the table and stated that there have been active negotiations over these levies as well as a tax on the gross revenues of some enterprises in the state.

Although she would not rule out new tax measures, House Speaker Laurie Jinkins, a Democrat from Tacoma, stated that the House’s priority is cleaning up the budget before discussing taxes.

Stokesbary expressed concerns that wealth and payroll taxes will force individuals and companies to leave the state, and Republican lawmakers are expected to oppose any new tax ideas.

According to Stokesbary, they will have a devastating effect on Washington’s economy and make it even more difficult to prevent a budget catastrophe in the future.

Pedersen cited the results of the November ballot proposals pertaining to the WA Cares program, the Climate Commitment Act, and the capital gains tax as a clear indication from the people we serve that they would rather we raise money for causes they believe are necessary.

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The rent stabilization measure is probably going to return.

According to the most recent Cascade PBS/Elway poll, about 70% of people support restricting the amount of rent increases that landlords can make, although Republicans and Democrats are sharply divided on the topic.

Some kind of rent stabilization is still something that House Democrats are interested in. The Senate rejected last year’s plans, which would have set a 7% annual rent increase cap, because they missed a crucial deadline. Legislative obstacles also prevented a similar bill from passing the Senate.

According to leadership, a new rent stabilization bill is expected to come from the House and proceed swiftly.

Jinkins stated, “We passed it off the House floor last year, and we’ll pass it off the floor this year.”

Pedersen thinks there is support among Senate Democrats, especially if the Legislature can fund more building in order to gradually lower prices.

Regardless of when the House delivers it to us, Pedersen said Thursday that the matter won’t be addressed until the second half of the session.

Rent stabilization measures are opposed by both Stokesbary and Senate Minority Leader John Braun, R-Centralia, who calls them a temporary fix. “We need to build more to drive down prices and have affordable access for everyone in order to address the housing affordability issues,” Braun stated.

The causes of the budget deficit are disputed by the parties.

Throughout the session, Democratic and Republican leaders are likely to continue to disagree about the underlying cause of the deficit.

The Republican argument that the deficit is the consequence of excessive spending has been denied by Inslee. Rather, he blames it on a rise in caseloads.

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Braun claimed that the current state of affairs resulted from the use of stimulus funds, carrying balances forward, and budgetary trickery.

“I know there’s a temptation to find a little extra money under the cushions and spend it on something that’s a good idea,” Braun said, having previously written budgets. Although there are many excellent ideas, we must eventually make difficult choices and ensure that we are living within our means.

Additionally, Stokesbary criticized the Legislature, claiming that lawmakers have not gone back and reassessed the effectiveness of current initiatives.

According to him, we hardly ever look back and examine whether we’ve truly succeeded in solving the issue we’re attempting to address.

Similar comments were made by Jinkins, who attributed the shortfall to both an increase in caseload growth and a reduction in revenue growth. While Jinkins concurs with Stokesbary that it is important to assess the efficacy of investments, she stated that it could be detrimental to divert funds from Medicaid, K–12 education, and behavioral health.

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