The House Democrats released their 2015-17 operating budget proposal late Friday morning, and will hold a public hearing on it in the House Appropriations Committee Monday afternoon.

The budget proposed by the House majority party spends nearly $39 billion. That is several billion more than our current budget. Further, this proposal increases taxes by $1.5 billion. I do not agree with their plan to raise taxes. Revenue collections in Washington are up over 8 percent for this budget cycle as the economy begins to stabilize. Many in the state, including in the 35th Legislative District, are still recovering from the Great Recession and I am committed to ensuring they are not forgotten in the budget writing process.

Let your voice be heard

I believe state lawmakers need to hear from taxpayers on this proposal – not just special interest groups. As budget hearings begin, I encourage you to join the debate! You can do this by testifying at the hearings scheduled for the Appropriations Committee over the coming days. You can find the agenda for budget hearings here. For information on how to testify in committee, click here. If you can’t make it to Olympia, please contact me directly. I am always happy to listen to your concerns and comments. You can also call the legislative hotline at: 1-800-562-6000.

Thank you for being engaged in the legislative process.

Rep. MacEwen in the media: 

Recently, I had the opportunity to discuss my B&O reform plan with TVW. I was happy to share my thoughts on why I believe this reform is an important step forward for Washington’s economy.

You can view the interview by clicking here.

It’s hard to believe we have just a few weeks left in the 2015 regular session. House committees are busy hearing Senate bills and Senate committees are hearing House bills. Yet much work remains to be done, including passing the budget. With an almost 9 percent increase in revenue, the highest collection in our state’s history, this can – and should – be done by April 26. Special sessions are costly and unnecessary and I’m committed to adjourning on time with a balanced budget that does not raise your taxes.

I have heard from a lot of you about the transportation revenue package passed by the Senate. This package included some reforms to WSDOT, but it also included a nearly 12 cent-per-gallon gas-tax increase. I am opposed to the gas-tax increase being proposed, as are many people I have heard from in the 35th District. Others say it is necessary to increase the gas tax in order to fund important projects including the Belfair Bypass in Mason County. Another option suggested to me has been using tolls to pay for the bypass should a transportation package not pass this year.

Some of you have taken the time to write in to tell me your thoughts on gas tax increases. Here is a sampling of that feedback:

• Since 2003 we are constantly bombarded with gasoline taxes or increased fees on the Narrows Bridge. The nickel tax, then a 9.5 tax, now 11.7, all of this in 13 years.  Then there is Gov. Inslee’s carbon fuel tax.  This will push businesses out of Washington state. I am opposed to all of these measures. – Robert, Port Orchard
• Please support the Comprehensive Transportation Bill. No one likes to pay higher taxes but it is more important to have safe roads (intersection at Highway 101 and Lynch Road) and not waste time in traffic jams (Belfair Bypass). Both these projects have been needed for a long time. – Diane, Allyn
• I have this gut feeling that the ‘road improvements’ will be in King County…and we seldom use those roads…how about toll fees? – Cindy, Olympia

Like a lot of you, I remain skeptical that a transportation revenue package will contain enough meaningful reforms to really improve our transportation system. As the package moves through the process, it will undoubtedly change, perhaps significantly, and the much-needed reforms may not pack the punch they initially did. Without reform we are simply pouring more tax dollars into a flawed system.

Examples of reforms include streamlining the permitting process and designing projects based on freight mobility and congestion relief. Additionally, we must end the practice of selling bonds to pay for sales tax on transportation projects. I introduced House Bill 1358 to achieve that goal. These reforms are especially critical in areas of our state, and the 35th District, in need of expanded economic development opportunities. They must be included if we are to have a truly comprehensive transportation package that reflects the needs of the entire state, not just Seattle.

I am committed to reviewing the package as it moves through the legislative process, and will keep your thoughts in mind. Your voice is the most important to me in this process, and I want to hear from you. Please take a minute to fill out this brief survey on transportation funding.

This past week I was honored to recognize Gretchen Schodde, founder of Harmony Hill in Union, who was awarded the Washington State Medal of Merit. She has dedicated her life to public health and wellness in Mason County. Her work in founding Harmony Hill has helped thousands of people on their journey with cancer, as well as their families. Her staff at Harmony Hill, including executive director Eric Blegen, work tirelessly to provide support and hope to those they serve. I am proud to call Harmony Hill a neighbor in Union, and thank Gretchen for her continued work in Mason County.

Finally, please take a moment to watch my latest video update. In this video I provide an update on my bill to reform our states B&O tax, House Bill 2150, which received a public hearing last week. To watch my video, click here.

Thank you for taking the time to read this update. I am always encouraged when I receive email, letters or phone calls from you. It’s great to see so many of you engaged in the legislative process. Please continue to contact me throughout session if you have questions, comments or concerns to share. I believe we can solve the issues facing our state by working together!

Join me tomorrow for a town hall:

Please join me and Rep. Dan Griffey for a town hall meeting!

When: Saturday, March 14 from 2-3:30 p.m.

Where: The Pavilion at Sentry Park (Senior Center), 190 W. Sentry Drive, Shelton

We look forward to updating you on the 2015 legislative session, discussing issues important to you, and answering your questions!

If you, or someone you know, have served as a Navy submariner like me, you may be familiar with halfway night.  Halfway night is a tradition celebrated at the halfway point of a patrol. It was always a good opportunity to catch our breath, and have a night to build solidarity amongst the crew. In the Legislature, we have reached the halfway point of the 2015 legislative session and we celebrated by sharing a few late nights on the House floor!

We aren’t using the halfway point of session as an opportunity to slow down, though. In fact, we are sprinting to the finish line of the 105-day session.  With revenue up over 8 percent and a strong economic forecast in February, there is no excuse to not get our work done within the allotted time. I am confident we will do the work necessary to negotiate a budget that is sensible, sustainable and does not raise taxes.

I have heard from a number of people from our district on the issue of taxes this year. Whether it be increasing the state gas tax, instituting a capital gains tax or the Business and Occupation (B&O) tax, I have heard loud and clear that taxes are standing in the way of real economic growth in our state. I am committed to working with my colleagues on both sides of the aisle to bring about much needed reform to the state tax code.

This morning, I testified in the House Finance Committee on my bill to reform one part of the tax code: our outdated and burdensome B&O tax. House Bill 2150 would eliminate the B&O tax for over 285,000 businesses in Washington state, provide flexible deductions to businesses grossing more than $500,000 a year, and put all businesses on equal footing. My bill is also revenue neutral, meaning it has no negative affect on the state budget. For more information on my bill click here.

This reform is about the future. Small-business owners know the risk it takes to open a business in Washington, which is consistently in the top five nationally for start-up business failures. They also know the B&O-tax bill comes regardless of how much money their business makes. It arrives between their mortgage and electric bill. They, and countless others, do this because they believe in the American dream. They do this to build our communities and create jobs in a slowly recovering economy. They know hard work is required, and are routinely up before the sun, and home well past dinner. Every community has folks like this.

We have an opportunity before us to give these businesses a fighting chance. We can undo decades of picking winners and losers by helping them grow and be the next Washington success story. I believe if we are to get Washington working again, we must work to reduce regulations and barriers to growth. By providing flexibility to our state’s job creators, I believe we accelerate job growth, and make Washington a leader nationally and a competitor globally.

I will continue to work with House leaders to keep this important reform moving forward!

Since my last update, much of our time has been spent on the House floor debating and voting on bills. I am happy to say I had three bills pass the House with strong bipartisan support.

• House Bill 1465 would require the Department of Labor and Industries to deposit funds for elevator inspections into a dedicated account. This will help ensure elevator inspection funds are protected and reduce a backlog of elevator inspections statewide. This bill passed with nearly two-thirds support in the House.
• House Bill 1636 would instruct state agencies with over 100 employees to issue a report on the number of persons with disabilities employed. The idea for this bill was brought to me by a constituent last year and helps identify work force opportunities for those with disabilities at state agencies. It passed the House unanimously.
• House Bill 1749, another constituent request bill, would end the requirement for homeowners working on their house to “flip” it to register with Labor and Industries as a contractor. Labor and Industries levied large fines against homeowners who made these types of improvements without registering as a contractor. Not only is this an unfair requirement, this practice hinders economic growth. I am happy it also passed the House unanimously.

I look forward to the Senate passing these bills and having them signed by the governor later this year.

Finally, I appreciate you taking the time to read this update and I encourage you to share your comments, concerns and questions with me. I am always happy to meet to talk about issues important to you and our community. Together we can make it morning again in America!

Upcoming town hall
Please join me and Rep. Dan Griffey for a town hall meeting!

When: Saturday, March 14 from 2:00-3:30 p.m.

Where: The Pavilion at Sentry Park (Senior Center), 190 W. Sentry Drive, Shelton, WA 98584

We look forward to updating you on the 2015 legislative session, discussing issues important to you, and answering your questions!

We have reached a major milestone in the 2015 legislative session. As of today, we have passed the policy and fiscal cutoff dates. This means bills that didn’t pass out of committee are dead for this session. For more information on cutoff, click here. While I am happy to see some bills “die,” there are others I would have liked to see move forward.

Here are two bills I am happy are still alive

House Bill 1219 would expedite permitting for bridges deemed structurally deficient. There are 130 structurally deficient bridges in Washington, and I believe we should look for ways to reduce the red tape in order to fix these bridges. As we saw with the Skagit River Bridge collapse in 2013, we can quickly and safely replace bridges by streamlining the process. It shouldn’t take a catastrophic incident for government to work more efficiently.

House Bill 1559 authorizes the board of regents at Washington State University to establish, operate, and maintain a school of medicine. By 2030 our state will be facing a massive shortage of doctors. This is an important step to increasing access to medical care and reducing associated costs.

A cutoff casualty

A good bill that died is House Bill 1607. This bill would recognize hydroelectricity as a renewable resource. Hydropower should be a part of the discussion when we consider available options for a diverse and effective energy portfolio.

A more extensive list was produced by the House Republican Caucus on bills that are dead and alive. This is not an exhaustive list and does not fully reflect all of my legislative priorities, rather it is a snapshot of bills still moving through the process. You can read more here.

A much needed reform

We live in the most innovative and productive state in the nation. Our state produces the world’s best airplanes, software technology, and is a gateway to economic opportunity. Yet, we are also ranked in the top five nationally for startup business failures by Forbes Magazine, and job growth outside of Seattle is stagnant. Many struggle to find work even as they hear the worst of the Great Recession is behind us. What’s more, businesses are unable to expand and accelerate job growth across the state.

I believe it is time to address a major factor in this lack of growth, and reform Washington’s business and occupation (B&O) tax code. Last week I introduced House Bill 2150 to modernize Washington’s B&O tax structure. The B&O tax was first adopted in the 1930s, and in the years since has been amended and complicated by both parties. The system is outdated and a major obstacle to business growth in our state.

The current system has 50 classifications and 10 different rates, plus multiple exemptions and deductions, which many call loopholes. Sectors of our state economy have struggled to survive, expand and add family-wage jobs. I believe the B&O system is partially to blame. As a state we have picked winners and losers for decades. I believe it’s time to put Washington businesses on equal footing and comprehensively reform our tax system, so businesses can survive, compete and grow.

My plan would give businesses the opportunity to deduct $500,000 of their gross receipts if that is greater than the other deductions the plan provides. This change alone would eliminate the B&O tax for over 285,000 businesses in the state. Businesses could also choose one of the following three deductions:

• Cost of goods sold;
• 30 percent of revenue; or
• Up to $200,000 per-employee compensation.

My plan maintains the aerospace and agriculture system currently in place. Further, we exclude non-profit organizations altogether.

You may be asking what this would do to our state budget. The impact of this reform is revenue neutral, meaning no money is taken out of the state coffers. We achieve this by consolidating the number of rates from ten to four, and having a service rate of 3.75 percent, retail/wholesale/manufacturing at 1.6 percent and telecommunications at 1.2 percent, while keeping aerospace at their current rate.

More information on exempted businesses by industry can be found here.

With this reform we make our states B&O tax fairer, flatter, and more flexible. We remove the tax burden on 285,000 businesses in our state with no impact on our state budget. We create a 21st century tax code that allows Washington state to lead nationally, and compete globally. And finally, we remove barriers to growth so that we can accelerate job growth and get Washington working again.

I look forward to this bill receiving a hearing in the House Finance Committee in the coming weeks.

Budget update

Last week we received another update on the revenue being collected by the state. The Washington Economic and Revenue Forecast Council revised their last report and indicated revenue for the 2015-17 budget will increase by another $129 million. This is in addition to the $3 billion in increased revenue over the last budget.

This is another positive sign and I believe there is no reason we can’t get a budget passed within the 105-day session.

In closing, I was honored to have my granddaughter visit the Capitol last week as part of the annual children’s day celebration. It truly served as a reminder that we are here to ensure our children and grandchildren inherit a better state, country and world!

I appreciate you taking the time to read this update and I encourage you to contact me to share your thoughts on these, and any other issues you care about.

Together, we can make it morning again in America!

Survey results
In my last email update, and during my telephone town hall, I asked you to share your thoughts with me on a couple of important issues. I am happy to share those results with you:

1. Do you support ending the death penalty in Washington state?

• Yes – 44%
• No – 51%
• Undecided – 5%

2. Do you support Common Core in Washington state?

• Yes – 20%
• No – 59%
• Undecided – 21%

3. Do you support the governors “cap and trade” tax proposal for Washington businesses?

• Yes – 18%
• No – 75%
• Undecided – 7%

4. With revenue up over $3 billion, do you support Gov. Inslee’s plan to raise taxes by $1.5 billion this year?

• Yes – 15%
• No – 80%
• Undecided – 5%

We are well into the 2015 legislative session, and while much work remains to be done, I am pleased to report we are making progress! I am happy to provide you with this update on the work taking place at the Capitol in recent weeks.

Budget writers are already meeting in both the House and Senate, putting us ahead of previous efforts to write the biennial budget. As a member of the House Appropriations Committee, I remain optimistic that we can complete a budget within the 105-day legislative session. With revenue up $3 billion, the state has the means to fund its obligations without raising taxes.

I believe we deserve a government that is efficient and effective. By reforming government operations, I believe we can achieve this goal. As the ranking member on the House General Government and Information Technology Committee, I am committed to finding inefficiencies in the way government conducts its business. With oversight of 68 state agencies, this committee plays a critical role in ensuring our tax dollars are spent wisely.

To help achieve that, I have introduced bills to reform government operations, and am happy to report they are receiving public hearings and moving through the legislative process. I introduced House Bill 1358 to end the practice of bonding sales tax on transportation projects. This bill is awaiting a vote in the House Transportation Committee, and I am hopeful it will come before the full House for a vote this session.

I also introduced House Bill 1357, which would eliminate the Certificate of Need requirement for kidney dialysis centers. Many in rural districts like ours have to travel long distances to receive treatment, which adds to the cost of receiving treatment, and is a burden on patients and caregivers alike. A Certificate of Need is issued by the state Department of Health after a lengthy and costly application process. This adds an unnecessary layer of bureaucracy to our health care system, and in turn, drives up costs. This bill is scheduled for a vote in the Health Care Committee, and I am looking forward to getting it passed on to the House floor.

Another reform bill I introduced is House Bill 1749, due to concerns brought to me by a group of constituents. This legislation would eliminate the requirement for people who undertake work on their own homes for the purposes of resale, known a “property flipping,” to register with the Department of Labor and Industries as a contractor. This policy was designed simply to raise revenue through fees and fines, and it ties up investigative and administrative resources at Labor and Industries. This fix will give people more flexibility to make improvements to their property. It is scheduled for a vote in committee next week, and I look forward to it moving on to the full House.

I also introduced another bill, House Bill 1930, to reform additional practices at the Department of Labor and Industries. Last year, a complaint against the Western Hockey League (WHL) alleged member clubs were violating the Minimum Wage Act, which launched a lengthy, costly and unnecessary investigation. There are currently a number of exemptions to the Minimum Wage Act on the books, and my bill would include amateur athletes among those exempted. Hundreds of amateur athletes play in the WHL. These young athletes receive invaluable training and educational opportunities, including college scholarships. And, many go on to play professionally. By unnecessarily targeting WHL clubs, it could jeopardize the future of countless youth who want to pursue this career path, as well as those who rely on these organizations for employment. This bill is scheduled for a vote in committee next week as well.

For years we have been hearing about the need for meaningful tax reform in Washington state from both Democrats and Republicans. That is why next week I will be introducing the largest reform to the Business and Occupation tax in our states history. In order to remain a leader nationally and a competitor globally, we must have a 21st century tax code that is fairer, flatter and more flexible. I look forward to sharing more details with you in the coming days!

It is an honor to represent you in Olympia, and I look forward to hearing from you on issues important to our communities!