The 2013 regular legislative session has ended. The Legislature will need a special session to finish its business. The only issue the Legislature needs to accomplish is pass an operating budget, but because of substantial differences between the House and Senate on a spending plan we will be going into a special session. It is disappointing, primarily because it is truly unnecessary to go into another special session – the seventh in last three years.

Transportation Budget – I voted “no”

On Sunday, the final day of session, we passed a transportation budget. Although the transportation budget does not include increased revenues, I voted “no.” The Columbian reported yesterday, April 29, that I voted “yes” so I wanted clarify my vote.

My reasons for voting no on the transportation budget are simple. First, there continues to be a lack of reforms in our transportation system and the Washington State Department of Transportation. House Republicans offered a plan called “Fix it before you fund it” that contained substantial transportation reforms. Despite design issues with our ferries, the department’s handling of the Columbia River Crossing, and other problems with the 520 Bridge we have not been able to get any of our reform proposals through the legislative process. Our taxpayers deserve reforms that provide accountability, taxpayer protections and that will put people back to work. I also have a problem with the transportation budget because it takes away tolling authority from elected members of the Legislature and gives it back to an unelected board – the Washington State Transportation Commission.

I do expect another debate on transportation funding in the special session as House Democrats’ are proposing a tax and fee transportation funding plan that would increase the gas tax by 10 to 13 cents, increase fees on licensing and registrations, as well as weight fees.

Operating budget

As I mentioned above, the main reason for the special session is the large differences between the House and Senate in their operating budget proposals. We should not be asking taxpayers to foot the bill for another special session. The state is expecting tax revenues of over $2 billion more for the upcoming budget. That is a 6.6 percent increase in revenue. Most families or businesses would love to see an increase of almost 7 percent in their budgets.

The Senate Majority Coalition Caucus passed a bipartisan budget proposal that does NOT raise taxes, yet increases funding for education by $1 billion to address the McCleary decision. It passed earlier in the session by a vote of 30-18. The senators that voted for the budget represented 30 of the 49 legislative districts, 38 of the 39 counties and over 4.2 million citizens. I may not agree with all of the Senate proposal, but it does approach our principles and priorities and is a good starting point.

The House Democrats’ budget proposal relies on $1.3 billion in tax increases. They will tell you it is to fund education. But as I just pointed out, the Senate plan funds education without new or increased taxes and our House Republican plan – Fund Education First – would have done that also. Those are two options on the table right there that fully fund education and don’t pit tax increases against kids and the classroom.

While the House Democrats’ spending plan relies on $1.3 billion in tax increases, their tax package raises “only” $879 million. So, they will either have to cut spending or find more taxes to increase. The tax bill, House Bill 2038, came to the floor for debate on April 24 but despite vigorous opposition by House Republicans the measure passed by a vote of 50-47, with all Republicans and five Democrats voting against it.

Republicans offered two important amendments. One amendment would have deleted the emergency clause in the bill. The second amendment would have allowed the taxpayers the opportunity to vote on the tax package in the November election. With an emergency clause, the bill would take effect immediately upon the governor’s signature. Unfortunately, it also would prevent voters from petitioning to put a referendum on the ballot. The voters in our state have made it abundantly clear they like to have the opportunity to vote on new or increased taxes. The voters will not get the opportunity to take this to a referendum and vote on this measure if it becomes law because the majority rejected our amendments.

Here is a list of the tax increases passed by majority Democrats in House Bill 2038:

Tax increases

• $534 million – Would permanently extend the business and occupation (B&O) surtax on certain businesses.
• $14.6 million – B&O tax rates for travel agents.
• $51.5 million – Would place sales and use tax on bottled water. This is the same tax that was repealed by voters in 2010.
• $43 million – Would repeal the nonresident sales and use tax exemption. This could especially hit our border counties very hard along Oregon and the British Columbia borders.
• $78.7 million – B&O taxes for high-tech research and development.
• $63.2 million – Public utility tax on truck transport of goods in state that are destined for out of state.
• $24.1 million – B&O and sales and use taxes for import commerce.
• $29 million – B&O tax for sellers of prescription drugs.
• $40.8 million – Fuel tax for extracted fuel.
• $5.2 million – Handling losses fuel tax.

TOTAL: $879 million

House Bill 2038 Finance Committee testimony

There was a lot of testimony against this bill when it was in the House Finance Committee. In fact, a number of people from Clark County drove up to testify. I want to thank those of you who were able to do so. This bill would increase taxes in Washington by almost $900 million, lead to jobs lost in Washington, as well as businesses closing and moving away. Below is some of the testimony from committee:

Terry Wollam | Clark County Realtor: “We lost half of our membership over this downturn…We’ve worked hard to stay in business. This is a tax that hurts us directly.”

Kent Van Arnam | Dick Hannah Dealership: “We employ 800 people, and we’re pretty clear this would have a detrimental impact on our business and on the amount of people employed with our company.”

Kelly Parker | Greater Vancouver Chamber of Commerce: “This will not net gain revenue. We believe the revenue source will dry up as Oregon stays home. And the unintended consequence is that 15 of our businesses I have listed here are asking you to pull this out and not approve this portion of the bill.”

Penny Ross | Vancouver: “If you have this commerce clause, where you are going to be attacking agriculture, more farmers are not going to be able to do what they are doing now. Your food is going to be impacted at the grocery store…There are a lot of non-profits that are going to be hit. How many of you have fed the homeless? I do it every Sunday night.”

That is just a small sample of the testimony from the hearing and those who will be impacted. I can assure you I will do what I can to make sure this tax plan does not gain any traction in the special session.

Please do not hesitate contact me if you have any questions. I will keep you updated as the special session progresses.