Legislative Commentary: May 16, 2019

Dear Friends,

I’ll start by congratulating the thousands of WSU students who were awarded degrees this past Saturday, at the end of the 2019 spring semester. And by thanking the state Department of Transportation’s branches in Spokane and Wenatchee for putting several “variable message signs” here and there along US 195 and SR 26 with safety reminders for travelers heading west from Pullman. We want Cougar Nation to be safe!

Speaking of travel, Governor Inslee must be taking a break from his job-hunting visits around the nation – because he’s been signing a lot of bills at the Capitol this week. Most of these signings are purely ceremonial, because under our state constitution the governor’s signature really matters only in two cases: when a bill is vetoed in part or in full, or when a bill has an “emergency” clause, which causes the new law to take effect as soon as it’s signed. The majority of the bills passed this year will take effect 90 days from the end of the session, which will fall on July 28.

The state constitution also limits the amount of time the governor to take action on bills passed by the Legislature; May 21 is the deadline this year, and the three new budgets are among the measures to be signed before that day is past. The same goes for the several bills that will raise taxes by more than a billion dollars over the next two years -- and up to $25 billion over the next 10 years.

Inslee has been waiting a long time for the opportunity to sign tax bills like these, because this is the first year since he took office in 2013 that Democrats have gotten to develop the new two-year state budget from scratch, all by themselves -- without Republicans blocking their tax proposals. But he should still be waiting, because none of these new taxes is truly necessary.

B&O tax hikes: why did Democrats tie them to higher education?

Two groups of employers in our state will soon be paying a higher business and occupation (B&O) tax, thanks to separate pieces of legislation passed in the final days of this year’s legislative session. Here’s a closer look at the tax hike that hits a wide swath of professional-service providers – House Bill 2158.

Before the session began the governor proposed a 67% increase in the B&O tax on such services (such as veterinarians, accountants, insurance agencies, etc.) as part of his budget package; his budget director defended the idea with the ridiculous claim that this sector of Washington’s economy has been undertaxed. That legislation didn’t advance, but then HB 2158 came flying in on day 72 of the 105-day session, well past the deadlines that typically apply to acting on legislation.

The HB 2158 tax will hit some 82,000 employers with B&O increases ranging from 20% to 67%, diverting an estimated $380 million into state government’s hands in just the next two years alone. The claim by majority Democrats is that the money will be dedicated to higher education – but why on Earth is higher-ed funding being tied to a big tax increase, when the Legislature already had buckets of money to invest without raising taxes by a single dime? It’s a stunning contrast to how Washington’s public colleges and universities fared when our mostly-Republican coalition led the Senate.

During our coalition’s first year at the helm, 2013, we reversed the long trend of regular tuition increases by making sure the new budget provided enough higher-education funding to allow a two-year tuition freeze. In 2015 we went a step better, making sure that new budget had enough higher-ed dollars to enable a tuition cut! All of this was done without new taxes. That’s what happens when you value higher education enough to support it with existing dollars, instead of making that support contingent on a new tax.

The Bernie Sanders crowd will be happy with the fact that this new tax is supposedly going to mean free college for some number of students. That’s not all: the Senate budget covered more than 2/3 of the higher-ed investments made in the final budget negotiated between the House and Senate, yet the Senate approach relied on far fewer new taxes – and no B&O increase. Maybe the majority Democrats, following the governor’s lead, simply decided in the end that professional-service providers needed to pay more tax, and higher-ed became a convenient hook.

In a post-session interview with the online Washington State Wire, the state director for the National Federation of Independent Business gave a blunt assessment of what these higher B&O taxes mean not only for employers but also for the issues of affordable housing and health care.

Present and accounted for

It’s not unusual for organizations with legislative agendas to look at votes on certain bills and assign post-session scores to legislators. But the most unique of the scorecards out there may be from WashingtonVotes.org, which looks not at votes on issues but the votes themselves -- as in who missed how many votes.

I’m proud that our 9th District team posted another perfect, no-votes-missed record this year, as reported. It’s understandable when legislators miss votes for health reasons (sometimes it’s best for everyone, to keep illness from spreading) or other unavoidable family commitments (like a christening – that happened to another senator this year) but most of us will go to great lengths to be present and accounted for. It’s the best way to represent our constituents!