Budget season is upon us, and we’re dedicating this edition of Morning Wire to parsing out what that means and what could be in store.
The points brought up here could be central to debates as the session moves forward, which means the insight into who and what’s at play in the budget-making process—lent by DJ Wilson, Publisher of the Wire—will be especially important to have in your back pocket.
Thanks for reading!
With help from Emily Boerger and DJ Wilson
1. House Dems’ budget, in perspective
Yesterday, House Democrats presented their proposed operating budget for FY 2019-21. At $52.6 billion, it’s 19.3 percent larger than the $44.1 billion package passed for FY 2017-19. The Legislature is working with a stronger-than-expected revenue forecast, thanks in-part to changes in timing of collections and one-time, large payments. The operating surplus heading into this budget process is about $4.5 billion.
At 3 hours and 51 minutes, yesterday’s public hearing was about average in length. The FY 2017-19 House budget hearing went 3:30. In FY 2015-17, the hearing went 4:03. The House is expected to move its budget in an executive session planned for Wednesday. The Senate budget may be out as soon as later this week.
2. How the budget process actually works
The public part of the budget process, which starts this week, is harried, compressed, and meant to limit public input. That’s not for a lack of interest in public input, like that offered in nearly four hours of a public hearing yesterday. Rather, the input process has been mostly behind closed doors, more indirect than direct, and has been months in the making already. To build from Churchill’s quote, this is not the beginning of the process, but the beginning of the end.
The process that starts this week is really more about holding together majority coalitions to be able to get across the legislative finish line. DJ Wilson takes you through some of this behind-the-scenes process by way of an old adage explained to him by a former legislator: 90 percent of Olympia plays defense, 9 percent plays offense, and 1 percent plays the budget.
3. Wire Insider: Rep. Drew MacEwen
Rep. Drew MacEwen represents Washington’s 35th Legislative District and serves as the Assistant Minority Floor Leader, Ranking Minority Member on the House Commerce & Gaming Committee, and Assistant Ranking Minority Member on the House Appropriations Committee. MacEwen joined us as a Wire Insider and spoke about his district’s priorities in the context of budgeting.
“In the 35th District, a rural area — it’s all of Mason County, part of Kitsap, and part of Thurston — you know…they want to make sure that they can make ends meet,” MacEwen said. “And, it’s making sure that their kids have a quality education, that the parents have an opportunity to have a good-paying job or run a business and be able to make those ends meet, and that, when they need the police or the fire or those public services, that they’re there. And, yet again, the policies…that come out of Olympia, oftentimes, are in direct opposition to that.”
4. Tax changes in the House Dems’ budget
Three bills that would change taxes and help fund the House Dems’ $52.6 billion Proposed Operating Budget were introduced yesterday. One bill introduces a new tax on capital gains and graduates the state Real Estate Excise Tax, another repeals a couple tax preferences and makes it harder for people who live out-of-state to get their home state’s sales-tax rate in Washington, and one increases the B&O tax on select businesses.
“The post-Great Recession economy should have produced enough revenue to fund current budget needs, but it didn’t,” House Finance Committee Chair Rep. Gael Tarleton said yesterday. “Because we have the most upside down, antiquated tax code in the country.”
5. House transportation budget may conflict with Senate
Yesterday, the House unveiled a $9.9 billion transportation budget that sets up a potential conflict with the more ambitious plans of the Senate. There, Senate Transportation Committee Chair Steve Hobbs floated the idea of a $17 billion package earlier this session.
A key difference is the idea of a carbon tax: The Senate may include one, while the House doesn’t. In any case, House Chair Rep. Jake Fey said his budget doesn’t include it because he doesn’t know that a carbon tax could pass the House. From yesterday’s press conference: “There’s no bill on our side to go forward with that [carbon tax]. We have a weight fee and ferry surcharges.”