Sonics | Special Session | Snow Storm

Here are five things we think are worth keeping your eye on in Washington state politics this week – from DC to Olympia to Seattle.  We’re building this Monday morning email to be a briefing of things we thing merit your attention for the week ahead. If you have suggestions on what to add, we’d appreciate the tips!

As always, thanks for reading our stuff.

1. Seattle Center, David Stern and SuperSonics

Olympia will not need to be involved in the arena rebuild necessary to bring back the SuperSonics (think Commissioner David Stern in Olympia).  That’s the big news from the City of Seattle after receiving two bids to renovate the Seattle Center to create a major event, music and performing arts center. Taking Olympia out of the mix significantly reduces political complexity on the topic. However, Seattle could get a great Key Arena rebuild and still not get an NBA or NHL team – something no one is talking about.

Folks at the City say the proposals have “blown me away.” AEG’s team tells us: “Three revenue sources from the arena itself – fully guaranteed by Seattle Partners (AEG) – will be dedicated to finance bonding capacity, meaning there is no risk to the City and no up-front City cost.”  Expect release of those proposals at a May 11 open house and a final recommendation to Mayor Murray by the end of June.

2. Special session begins; Olympia empties

Senate Republicans put the House Dems tax package up for a vote this weekend: it lost 0-48. It was an impressive stunt, showing how little support there is in the Senate for the package. It highlights also how unlikely it would be to pass the House, another reason it hasn’t come up for a vote there. Sen. Ranker says it’s time for a “go home budget,” meaning one that neither side would get too excited about but both can declare victory with.

The legislature has gone into a special session each year since 2010. It’s now the new “normal.” To oversimplify, House Dems want a 16% increase in spending over the last biennial budget, with Senate Republicans wanting a 12% increase. Both seem like big numbers – like 1,936: the number of days since the McCleary decision, yet to be addressed.

Of the 147 members of the legislature, only about 8-10 are in a position of significant influence on the budget at this point. Negotiations happen privately between chambers, then caucus leaders have to line up the votes for a compromise. Lots of time to watch paint dry for the other members.

3. Trump tax reform could be a major blow for WA

One of the key elements taking shape in Pres. Trump’s tax reform plan is to end the deductions for state and local taxes.  It has merit from a simplification perspective and would generate tax revenue. It’s one of the largest tax deductions in the federal tax code, 2x what the charitable deduction amounts to.

This would hit residents of “blue states” higher than “red states.” About 1/3rd of the entire benefit goes to NY, NJ, and CA. In Washington, thanks to former US Rep. Brian Baird and Sen. Maria Cantwell, you can elect to deduct sales tax instead of income tax (since we don’t pay income tax) on your 1040.

Because sales tax is paid as a higher relative share of their income by lower income folks, eliminating the benefit of a partially offsetting federal deduction would increase the already regressive tax burden faced by Washington residents. And, because low income counties in Washington state are generally Republican counties, it’s likely this policy will hurt low income Republican-leaning areas more, in relative terms, than the high-income, urban targets.

4. Debrief on the Regular Session

Our first “Breakfast with the Wire” event is coming up on May 9th, and I expect it will be an honest, insightful conversation with some of the smartest folks in Olympia. From the capital infrastructure to mental health, from internet privacy to gun safety, there were a number of important issues at play in Olympia not named McCleary.

This session will get into some of those policy weeds.  It would be great to have you with us for this first event, and join Sen. David Frockt, Rep. Drew Hansen, and Nathan Johnson from the HCA.

Events like this are our primary source of revenue to support our content.  So, come, have breakfast, network with folks, and ask our panel members really hard questions…!

5. Ed Murray’s snow storm moment

Mayor Murray’s response to the sexual abuse allegations (rather than the allegations themselves) may have been his “snow plow” moment. That was the issue that galvanized a narrative about former Mayor Greg Nickels and made a strong incumbent look vulnerable ahead of his 2009 re-election campaign.

One of Murray’s allies calls his response to the allegations “ugly” in a powerful call for Murray to step down.  Notably, no one from his Olympia days has publicly voiced support for the Mayor. The City Council declined to stand by him, too. This context makes his call for a high-earners income tax appear to be an attempt at distraction rather than a thoughtful plank in a re-election platform.

This is a mayor that is alone politically, something the allegations have highlighted rather than created.

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