2021 session ended with a new income tax on capital gains, no emergency powers reform

May 24, 2021

In my last email update, I discussed the House Republican case for emergency powers reform. All session long, we attempted to convince the majority that the Legislature should have more involvement during emergencies and that reform was necessary in this regard. About a week before the end of session, I made a motion on the House floor that would have allowed my emergency powers reform bill to receive a vote. The majority rejected the motion, signaling to the governor that he could continue ruling unilaterally.

That decision encapsulates what much of the 2021 session was like. There were some bipartisan successes, yes, but we also saw the majority steamroll through a progressive agenda that will hurt many Washington families. Not only did the majority pass an income tax on capital gains, which may lead to yet another push for a statewide income tax, but they also passed two environmental bills (HB 1091 and SB 5126) that will significantly increase the price of gasoline while doing very little to reduce the carbon in our atmosphere.

Washington voters have repeatedly rejected income tax proposals and carbon pricing schemes. That didn’t matter to the majority, which is deeply concerning as we are here to represent you, not our own interests.

2021-23 operating, transportation, and capital budgets

There are a lot of good things in the $59 billion 2021-23 operating budget, but I ultimately voted against it because it relies on revenue from the income tax on capital gains I mentioned above. Additionally, it grows spending by $7 billion, an increase of 13.6% over the 2019-21 budget.

Since the governor came into office in 2013, we have seen a 74% increase in state spending, with the operating budget exploding from $33.8 billion to $58.9 billion. I continue to be concerned that the majority’s tax-and-spend approach will eventually lead to devastating cuts or a reliance on even more burdensome new taxes. I simply don’t understand the reluctance to pass a sustainable budget that doesn’t rely on new and higher taxes. Earlier this year, House Republicans proved the Legislature could pass a such a budget. There simply must be a willingness to do so.

The 2021-23 transportation budget passed with broad bipartisan support in both chambers. The $11.8 billion budget will continue funding the basic transportation needs of our state by investing in the maintenance and preservation of current transportation systems, the Washington State Department of Transportation, the Washington State Ferry system, the Washington State Patrol, and other state transportation agencies.

I worked hard with Rep. Dan Griffey to ensure the following items were included in the budget:

  • Modified WSP-Shelton water agreement – We negotiated with the governor’s office to remove the latecomers fee that existed between the Washington State Patrol Academy and the City of Shelton. The latecomers fee has long hindered economic growth around the Port of Shelton and the WSP Academy. Its removal will make it easier for properties to use the water line infrastructure that currently exists, which will help grow the local economy.
  • Kitsap toll credit – New Kitsap toll credit language in the budget includes provisions that will improve the passenger-only ferry system in Kitsap County.
  • SR 302 corridor study – SR 302 has a history of storm-related damage that has resulted in a number of road closures. The $800,000 corridor study in the budget will attempt to set a course for what improvements need to be made in order to make the highway more resilient.

Additionally, we successfully fought to retain funding for all existing Connecting Washington transportation projects in the 35th District, including the Highway 3 freight corridor, formerly known as the Belfair Bypass project.

Other highlights of the 2021-23 transportation budget include:

  • $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.
  • $224 million for Transportation Improvement Board.
  • $101 million for County Road Administration Board. 

I’m proud we were able to keep the promises we made to all of you, especially when it comes to funding for the Highway 3 freight corridor. That project, and the others we were able to secure funding for, will make a meaningful difference in our district for years to come.

The 2021-23 capital budget received unanimous support in both chambers. The $6.3 billion budget will fund various construction projects throughout the state, making significant investments in water, sewer, and broadband infrastructure with the help of one-time federal funds. Working together, Rep. Griffey and I were able to secure more than $25 million in local project funding. Some of the investments include:

  • $8.8 million for improvements at the Washington Corrections Center in Shelton and the Mission Creek Corrections Center in Belfair;
  • $2.05 million to rehabilitate and re-equip Well 1 and convert the water transmission main in Shelton;
  • $2.05 million for the design and construction of a 750,000-gallon in-ground storage tank at the satellite wastewater treatment plant in Shelton;
  • $1.49 million for grants for a range of land protection and outdoor recreation projects in Yelm and Rochester;
  • $1.29 million for Shelton Youth Connection for renovations and to add 12 age-appropriate housing options for young adults experiencing homelessness or at risk of experiencing homelessness;
  • $900,000 for grants to support cleanup efforts at the Shelton C Street Landfill;
  • $835,000 to provide fiber optic infrastructure to increase capacity at each cell tower in the Gold Mountain Communications Zone in Bremerton;
  • $344,000 for restoration efforts at the Sargent Oyster House in Allyn;
  • $82,000 to provide additional space at the Turning Pointe Survivor Advocacy Center in Shelton; and
  • $62,000 for improvements at Mason County Veterans Memorial Hall in Shelton.

In addition to local projects, other capital budget highlights include:

  • $733 million for the state’s four-year institutions.
  • $730.6 million for 2021-23 School Construction Assistance Program.
  • $512 million for the community and technical college system.
  • $326 million for 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 the University of Washington.
  • $129 million from the Public Works Assistance Account to issue grants and loans to local governments for infrastructure projects.
  • $95 million in behavioral health capacity grants for community mental health services.

It’s great to see the Legislature’s ongoing commitment to making mental and behavioral health care the priority it should be, especially as we continue recovering from the global pandemic. Many adults have experienced mental health challenges over the past year, but so have our children. We must continue providing the capacity and resources necessary to get Washingtonians the help they need in a timely manner. Speaking of our youth, I was very pleased we were able to secure more than $1 million in funding for Shelton Youth Connection, a vital organization in our community that serves at-risk individuals ages 12 to 24. By funding key renovations and the construction of age-appropriate housing options, we are going to see improved outcomes for those who need our help the most.

Contacting me

Although session is now over, please know I am here to serve you year-round. I encourage you to continue reaching out to me with your comments, questions and concerns. My email address is Drew.MacEwen@leg.wa.gov, and my phone number is (360) 786-7902.

It is an honor to serve you.