The Budgets Are Out!

 
I have had very busy week in the Appropriations and Finance committees, both which I serve on, considering bills that affect our state budget.  I wanted to take this opportunity to update you on how the House and Senate budgets compare with each other.

Sustainable responsible budget vs. one-time transfers and budget tricks

 

We have come a long way since the deep cuts the legislature made during the Great Recession. And we have a ways to go. Our budget solves some of our underlying funding issues and invests in education, mental health, and other programs we know make our state better.

The Senate Republicans have claimed that they can balance our state budget without new taxes, but their budget only balances with some pretty big transfers of funds. Transferring funds to pay for state services isn’t sustainable – it’s like using your children’s education fund to pay your rent. The college fund will run out, leaving you unable to pay rent and your kid won’t be able to pay for college.

Among other things, the Senate Republican budget takes money away from the Public Works Assistance Fund, that’s money that creates jobs and is supposed to fund projects that support clean drinking water, protect our environment and preserve our public health and safety. And they divert recreational marijuana taxes from health and drug awareness programs to meet their bottom line.

Instead of asking the very-wealthy to pay their fair share in taxes, the Senate Republicans are raiding dedicated accounts and cutting services that benefit all of us.

Addressing our regressive tax system vs. sticking with the status quo

 

Our state has the most unfair tax system in the nation. You read that right, the most regressive of all 50 states. That means that middle-class and working families pay four to seven times more of their income in taxes than the wealthiest five percent.

We’re asking the wealthiest Washingtonians to pay their fair share toward reinvesting in our future. As we fully fund education, repair our broken mental health care system and restore the Safety Net, we should assess the profits in the brokerage accounts of Washington’s wealthiest, not the checking accounts of Washington’s working families.

We are proposing a small 5 percent Fair Share Tax on capital gains when a person makes more than $25,000 in profit (or $50,000 for joint filers) from the sale of stocks, bonds and other lucrative investments. This proposal would almost exclusively impact the very-wealthy in our state. In fact, according to non-partisan analysis, families with a total income less than $250,000 a year would have only accounted for less than 3 percent of capital gains from 2007-2012. Instead, this fair share tax will impact only about 32,000 of Washington’s wealthiest individuals and families. The tax would completely exempt retirement accounts, most primary residences (up to $250,000 for single filers and $500,000 for joint filers), and most sales of agriculture lands and timber.

The money from the sale of these investments will be invested right back in our education system, funding public schools and making sure that higher education remains affordable. We will be able to invest $1.2 billion in fully funding education for Washington’s one million schoolchildren from the fair share tax on capital gains alone.

Meanwhile, the Senate chooses to stick with the status quo – leaving our middle-class and working families to bear the burden while the protecting the wealthy few.

In the upcoming weeks, we will continue to our negotiations with the Senate as we develop a finalize version of our 2015-2017 budget.  As always, I welcome your input and feedback on the budget.  Please feel free to contact my office with your concerns and questions as we enter the final weeks of the legislative session.  I look forward to hearing from you.