House Appropriations Chair Ross Hunter, D-Medina.
OLYMPIA, March 5.—The state House Tuesday night passed a supplemental budget that sets the wheels in motion for an on-time adjournment next week, and points the way toward a much bigger debate over taxes next year.
The latest version of the House budget, written by Democrats, now stands somewhere in the neighborhood of $240 million. In this form it is substantially different than the one passed by the Senate last week, whacking away at business tax exemptions, counting on new taxes, and enacting a teacher cost-of-living pay raise. But no matter, and no point in calculating a precise number, either. Most of those differences can be expected to drop away rather quickly once budget-writers begin dickering in the back room. “There are a bunch of differences that we will have to resolve, but I don’t think anyone is really interested in having a big fight about this,” said House Appropriations Chairman Ross Hunter, D-Medina. “I don’t think we are going to be here that long. I’m planning on going home on Thursday [March 13].”
And once he does that, he’ll have a good nine months to rest up for next year. This year’s relatively drama-free budget debate is a pleasant prelude to what is certain to be a nasty, bruising months-on-end battle when lawmakers return to the state’s capital city in 2015. Lawmakers right now are making a few tweaks to the $33.6 billion 2013-15 budget they spent half a year debating last session. This year they don’t have any major financial problems to deal with; the economy continues to sputter back to life, and there aren’t any of the usual structural budget problems to deal with — thanks to that lengthy fight last year, the state’s current spending plan is not out of whack.
But just wait for next year. Lawmakers will be dealing with the full-on horror of the Supreme Court’s McCleary decision, which requires them to dramatically increase spending on K-12 schools by the 2017-18 school year. The price tag could run as high as $5 billion, maybe even more, at least according to estimates on the Democratic side of the aisle. Republicans dispute those numbers. But clearly no easy money grabs are going to do the trick, and lawmakers are going to have a most taxing debate. That one won’t be so easy.
“I see a dark cloud in every silver lining,” said House Republican budget lead Bruce Chandler, R-Granger.
Long, Desultory Debate
Rep. Charles Ross, R-Natches, speaks during Tuesday’s floor debate.
The relative lack of trouble meant there wasn’t really that much material on which to build a rollicking argument on the House floor. Best line of the day came from Rep. David Taylor, R-Moxee, who observed that the budget was leading the state down the “bunny hole of doom.” But he had to admit he used that line for the first time in a 2010 budget debate. Not that anything had changed since then, of course.
There was much talk about devils that are in the details, wizards that stand behind the curtain, and tax increases that are just around the corner. Ultimately the budget bill passed by a largely party-line vote of 53-44. The budget was adopted as a striking amendment to Senate Bill 6002, the budget bill the Senate passed last week. State Rep. Larry Seaquist, D-Gig Harbor voted with the Republicans against the measure.
“Bunny hole of doom”: State Rep. David Taylor, R-Moxee.
Worth noting is that the budget passed by House Democrats Tuesday is configured a little differently than what they proposed last week. They had somewhere on the order of $240 million to $270 million in spending proposals, depending on how they were counted, but the most controversial elements were set aside in separate bills. Those items included things like a teacher cost-of-living pay raise and a new preschool program for low-income children. The structure of the proposal made it clear which items were on the long-term wish list and which ones might be considered immediate must-dos. The must-do items were contained in a “base budget” bill that really wasn’t that much different than the $97 million budget proposed by the Senate. Though confusing, the House proposal made it clear that there were only a handful of items that needed to be negotiated before adjournment.
The new version of the bill basically lumps everything together. Hunter said he was responding to press complaints that the budget proposal was unusually complicated. But the top issues are the same. The House would spend about $20 million on K-12 overhead costs, and about $20 million less on college scholarships. The Senate version also enacts and extends a number of tax breaks, including a key provision that would continue the state’s current tax break for high-tech research and development. All told, they are worth about $8 million in the 2014-15 fiscal year, but they will balloon to $83 million in 2015-17, Hunter said.
At a time when the Legislature has to come up with big money to satisfy the Supreme Court, new tax breaks “are not something we are super-excited about,” he said.
A One-Corner Budget
House Finance Chair Reuven Carlyle, D-Seattle.
The key Republican message Tuesday was that the House budget was written by Democrats alone. The Senate budget was the product of negotiations between Republicans and Democrats in the upper chamber, and it is an approach the House Republicans support as well. “I would say it certainly has the support of two-thirds or three-fourths of the Legislature,” Chandler said. “I hope that the ultimate budget that we will see returned to us will be supported by four fourths of the Legislature or five-fourths of the Legislature.”
Republicans also noted that for some of the items on the House wish-list, the Democrats are counting on ending tax exemptions that have been debated for years on end – imposing the sales tax on bottled water, restricting the out-of-state sales tax exemption enjoyed mainly by residents of Oregon and Montana, taxes on oil refineries and wholesalers of prescription drugs. The fact that strong arguments have been mounted in favor of their continuance demonstrates the folly of that approach, Republicans said. All told, the House’s anti-loophole effort would generate about $100 million the first year and $200 million over a two-year budget cycle – not even close to the amount that is required by the Supreme Court decision. The House also is depending on a new 95 percent tax on the sale of e-cigarette vapor products.
The Democratic budget bill “continues the myth that we can fund McCleary by closing exemptions,” said state Rep. Cary Condotta, R-Wenatchee. “I heard it at my tele-town hall the other night – you don’t need to raise taxes, you can just deal with exemptions. I’m sorry, that is not going to get us there – it just isn’t.”
House Finance Chairman Reuven Carlyle, D-Seattle, defended the budget plan. “This striker is not only better looking and more responsible, it actually is more honest with respect to an alignment between spending and the revenues that we present as a chamber.”
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