State Legislature Continues to Grapple with Budget

By: Brad Boswell Posted: 04/24/2017

Thirty-day special session begins

The state legislature ended its regular session on Sunday, April 23, but with lawmakers unable to come to an agreement on the budget, Governor Jay Inslee called a 30-day special session that began at 10:00 a.m. Monday morning.

With a divided legislature—a Majority Caucus Coalition-led Senate and a Democratic-led House—and varying ideologies among lawmakers, it is not surprising that legislators did not come to an agreement on the budget before the end of regular session. The extension of the session will give negotiators additional time to come to a solution on how they will balance the budget, and deciding if additional revenue (taxes) are needed to do so. As of right now, there is no expectation of finding a compromise anytime soon and the 2017 legislative session is likely to drag on into late spring and possibly early summer.
One of the biggest disagreements between Republicans and Democrats is whether new taxes will be needed to solve the budget issues this year, including meeting the state’s constitutional duty to fund K-12 education. Budget proposals made by Governor Inslee and House Democrats include new taxes to fund education. Meanwhile, the Republican budget proposal rejiggers property taxes to shift revenue from local levies to the state for education. The Republicans have insisted that with 12% growth in state revenue, state revenue, new taxes are not necessary and have been frustrated because the House has not yet voted on their tax package.
This frustration fueled a battle on the Senate floor Friday, adding controversy to a week otherwise spent working on concurrence votes (each chamber of the legislature deciding on whether to accept amendments adopted by the opposite chamber). Republicans forced votes on two of the aforementioned tax proposals: a capital gains tax and an increase in B&O tax. Democrats were not happy about this move, stating that the tax votes should come after reaching an agreement on the budget. Republicans countered that it was necessary to have a vote on these taxes to show whether there is the political will to include them in the end. Both measures were defeated unanimously.
Republicans now believe that they can move forward with negotiations with those two taxes off the table. Democrats argue that nothing is off the table, and maintain that they want the budget worked out first. Needless to say, the tone and tenor of Friday’s floor battle do not foreshadow a solution in the immediate future.
One final factor in budget negotiations is the next economic and revenue forecasts, which will come out in June. The economic forecast, which indicates the health of the Washington economy, will be released first, followed by the revenue collection forecast. Observers expect a positive revenue collection forecast that will add several million dollars and because of this, it is likely that the legislature will wait for these forecasts to agree on a budget.

Paid Family Leave
Meetings between legislators, business, and the labor/advocate community on paid family leave will continue during special session. Conversations have been productive and parties involved remain optimistic. The Chamber has been working closely with partners in the business community to collaborate with leaders across government and industry toward a statewide policy on paid family leave.
Throughout this process, we will continue to share members’ perspectives on the impacts of various elements of paid family leave policies. Through roundtable sessions, as well as a member-led task force on workplace equity, we heard from businesses of all sizes across a range of industries. Chamber members consistently voiced their understanding of the need for people to balance their jobs and care for their families, particularly at important times in their lives.
For more information about the Chamber’s legislative advocacy, please contact Mindi Linquist, our vice president of external relations.