Monday, January 14, marked the start of the 2019 Legislative Session. As an odd-numbered year, this is both a budget writing session and a “long,” 105-day session. In recent years, budget writing sessions have extended past 105 days, with multiple special sessions needed to address budgetary stalemates. However, large Democratic majorities this year may minimize deadlock.
Last week also brought the inauguration of 28 new legislators, following the November general election. There will also be a 29th new legislator, following Senator Kevin Ranker’s resignation.
The new class of legislators is the most diverse in Washington state’s history, including 14 women, eight members of color, six millennials and one refugee.
In addition to many new faces in Olympia, this year also brings new leadership, committee names and committee assignments.Gov. Inslee’s State of the State and budget proposals
Governor Jay Inslee’s State of the State address
on Monday, January 14, spotlighted climate change initiatives, behavioral and mental health policy, affordable housing and homelessness reformation. In his speech, he also looked forward to 2020, noting that he is “seriously considering running for president."
The Governor’s proposed operating and capital budgets include over $3.7 billion in additional spending. To fund the spending increase, Governor Inslee proposed an increase to the business and occupation tax (B&O tax) on services provided by accountants, attorneys, real estate agents and others. Under Inslee’s plan, the B&O tax would increase from 1.5% to 2.5%, raising an additional $2.6 billion over the biennial (2019-2021) budget.
Around $975 million would be raised in fiscal year 2021 from a 9% capital gains tax on earnings from the sale of stocks, bonds and other assets above $25,000 for individuals and $50,000 for those who file taxes jointly. Finally, there would be a graduated real estate excise tax (REET), as opposed to the current flat REET at 1.28%. The proposed, graduated REET rates range from 0.75% to 2.5%, depending on the sale price.
On Wednesday, January 16, the Senate Ways and Means Committee held a public hearing on the two revenue proposals that were part of the Governor’s budget request legislation, HB 5129
(capital gains and B&O tax) and HB 5130
(REET). There was ample public testimony on both bills. No action has been taken or scheduled. Transportation proposals
Senator Steve Hobbs, Chair of the Senate Transportation Committee, presented a transportation revenue proposal on Friday, which includes a total of $16.3 billion in spending and $17 billion in revenue. The majority of the Hobbs' package is funded by a carbon fee and a fuel tax. Sen Hobbs' will hold a work session on Thursday, January 24, to accept public comment on his transportation funding proposal. Learn more
For more information about the Chamber’s state-level advocacy, please contact Dominick Martin
, the Chamber’s vice president of external relations.