Session recap: Democrats shut public out of process to pass $2 billion in new tax increases

May 17, 2019

Although it was always likely the Democrat majority would increase spending and raise taxes this year, we didn’t know what tax increases would be coming to the floor until the final weekend of session. And that’s because they used title-only bills to disguise their intentions.

The Seattle Times editorial board explains:

They used a parliamentary gimmick called a “title-only bill” to bypass the state constitution and cut the public out of the process. Here’s how it works. At least a couple of weeks before the end of the session, lawmakers file a bunch of title-only bills on different topics. This year there were about two dozen. Each one has a generic title and one sentence body like, “The legislature intends to enact legislation concerning tax revenue.” Then, if lawmakers decide to rush something through at the end of the session, they can cut that sentence and replace it whatever they want.

These title-only bills were used as vehicles to pass $2 billion in tax increases on Washington families in the dead of night. And it wasn’t just The Seattle Times editorial board that took notice. Take a look at the following editorials that have been written since session adjourned on April 28:

When Democrat budget writers sat down to work on the final operating budget this year (Republicans were not invited to the table), they had record revenues and a $2.8 billion surplus to work with. By the time they finished, they had hiked spending 18%, increased taxes by $2 billion, and left only $100 million in reserves.

Their $52.4 billion operating budget relies on the following tax increases:

  • A business and occupation (B&O) tax surcharge on services that will impact 90,000 employers and raise costs for consumers.
  • A new, graduated real estate excise tax (REET) that will restrict housing supply, increase rents and harm our economy.
  • A higher tax on oil that will increase the price of gas.
  • A B&O tax increase on large banks that will result in costs being passed on to customers.
  • A change to the nonresident sales tax exemption, which will result in fewer Oregonians shopping at Washington businesses in our border communities.

Keep in mind this $2 billion doesn’t include the Democrats’ levy lift bill, which will increase property taxes for families across the state by modifying the amount local levies can collect for K-12 enrichment programs.

With the adoption of the 2019-21 operating budget, the Legislature will have increased spending a whopping 70% since 2013. I encourage you to share the chart below with your family, friends and neighbors.

The positives of session

Thankfully, Republicans were able to stop a number of harmful policies this session:

  • House Bill 2156 would create a new capital gains income tax.
  • House Bill 1110 would create a new low carbon fuel standard program, which would significantly increase the price of gas and goods.
  • House Bill 1491 would restrict scheduling options for employees and employers, hurting various industries around the state.
  • House Bill 1515 would force many individual contractors to work as employees as opposed to being their own boss.
  • Senate Bill 5395 would require every school to provide comprehensive sex education.

And while much of session was contentious, another positive is both sides were able to come together to tackle some important priorities for our communities and the state:

  • Senate Bill 5380 will establish new rules regarding opioid prescribing and the dispensing of opioid overdose reversal medication. It will also require physicians to discuss alternatives to opioids with patients before prescribing them.
  • Senate Bill 5091 will increase the excess cost multiplier for special education students, which will result in more funding.  
  • Senate Bill 5511 will expand broadband to enable economic development, public safety and health care across our state.
  • Senate Bill 5649 will eliminate the statute of limitations for most sex crimes committed against minors, and extend the statute of limitations for most other sex offenses. The bill mirrors the one offered by my seatmate, Rep. Dan Griffey, who has done incredible work on this issue.
  • The 2019-21 capital budget provides record funding for mental and behavioral health infrastructure around the state.

Speaking of the capital budget, I worked closely with Sen. Tim Sheldon and Rep. Griffey to secure $81.4 million in local project funding for our district. Some of the investments include:

  • $26.8 million for the ongoing development and implementation of the integrated Chehalis Basin Strategy;
  • $22.4 million for corrections facilities repair and improvements;
  • $6.8 million for the Skokomish River restoration;
  • $4 million to relocate the Schafer campground outside of the floodplain of the East Fork of the Satsop River and build a new welcome center;
  • $3.5 million for the Shelton YMCA;
  • $2 million for the Belfair sewer extension;
  • $600,000 for the Holly Ridge Center in Bremerton;
  • $350,000 for the Skabob House Cultural Center at Skokomish Indian Reservation;
  • $265,000 to help replace the irrigation system at Mason Co. Recreation Area;
  • $253,000 to help with salmon recovery in Big Beef Creek Estuary.

Three of my bills signed into law

Since the adjournment of session, three of my bills have been signed into law by the governor.

House Bill 1430 will extend the expiration date of the Licensing and Enforcement Systems Modernization Project Account to September 2023. Revenue for the account, which was created in 2015, comes from a fee applied to certain liquor licenses and the licenses of marijuana producers, processors, and retailers. It is dedicated for expenses associated with the replacement and modernization of the LCB’s computer system. That work is already underway, but was not going to be completed by the time the account was scheduled to expire in June. Extending the expiration date of the account will allow time for the LCB to complete its work.

House Bill 1557 will update the licensing process for businesses applying for an annual liquor license. Currently, business owners pay up front and then go through a review process to get final approval for the license. However, if the review takes longer than expected, they may find themselves paying for a liquor license they aren’t able to use. To mitigate this, HB 1557 will require the expiration date of a liquor license to be set 12 months from the date of approval.

The bill also addresses a provision in current law that requires an applicant to have control of the premises to be qualified for a liquor license. When HB 1557 goes into effect, a business owner will be allowed to apply for a liquor license for a physical location without first signing a lease or buying the property.

In sum, the bill will help mitigate some of the upfront cash flow concerns associated with opening a new business and obtaining a liquor license. We want to make sure the system is fair for our small business owners, and the provisions in this bill will help in that effort.

House Bill 1146 will extend the state’s Christmas tree grower licensure program by 10 years. The program, which was created in 2007, requires Christmas tree growers to obtain a grower license from the Washington State Department of Agriculture (WSDA). The annual fee for a license is $40, plus an acreage assessment of $3 per acre. Fees are deposited into a dedicated Christmas tree subaccount within the WSDA, which are then allocated for a number of ongoing research and preservation efforts.

HB 1146 will ensure the Christmas tree industry in our state, which ranks fourth in production nationwide, remains compliant with the USDA and is able to continue exporting trees here in the United States and around the world. Without this bill, the roughly 250 Christmas tree growers across the state would be at a significant competitive disadvantage.

Each of these bills will become effective later this year.

Contacting me

Although session is now over, please know I’m here to serve you year-round. Don’t hesitate to contact my legislative assistant, Rob Barnes, if you’d like to schedule a time to sit down with me during interim to discuss the issues most important to you and your family. You can also email me directly any time at Drew.MacEwen@leg.wa.gov with your comments, questions or concerns.

It is an honor to serve you.