‘Underwhelming’: Washington Republican lawmakers react to Inslee’s budget proposal
Republican leaders in Washington state’s legislature criticized some of Democratic Gov. Jay Inslee’s budget proposals Friday, saying new taxes are unnecessary.
The Democrat-controlled legislature will write its own budget plans during the upcoming 2021 legislative session that kicks off Jan. 11.
Inslee unveiled budget proposals Thursday that include an operating budget with $57.6 billion in general fund spending and plans to empty the state’s Rainy Day Fund and introduce taxes on capital gains and health insurers. The proposal argues increased spending is needed to continue responding to COVID-19, rebuild the economy, and address societal inequities while avoiding cuts to existing services and keeping the budget balanced.
Republicans critiqued the governor’s proposed plans at a virtual news conference Friday.
Sen. Lynda Wilson, R-Vancouver, is the top Republican on the Senate budget committee. She said she was encouraged by the governor’s recent announcement of guidance that loosens restrictions for reopening schools to in-person instruction, but that she’s disappointed in spending increases and new taxes.
“I think that we need to keep looking at ways to help our businesses in turn, putting our people back to work,” she said. “That’s the best answer to ... get our economic engine rolling again.”
Rep. Drew Stokesbary, R-Auburn, the top Republican on the House budget committee, said the best way to characterize his reaction to the governor’s proposals is “underwhelming.” He thought the governor could’ve come up with “a few new bold ideas,” he said.
“I think a lot of his proposals are just the same versions of what he’s tried before,” he said.
He knocked the governor’s cap-and-trade proposal, a proposed tax on health insurers that would fund public health, and what he saw as inadequate actions on homelessness and the Working Families Tax Credit.
The governor’s proposals include several efforts aimed at preventing homelessness, including $164 million for rental assistance through mid-2021, $164 million more in the next biennium, and $220 million in the capital budget to build affordable housing units. But Stokesbary argued the governor’s proposal doesn’t do anything new to address the crisis.
In Inslee’s proposal that puts a cap on greenhouse gas emissions for some industries, money from the sale of greenhouse gas credits would go into an account. Some of the money could fund the Working Families Tax Credit, Inslee said earlier this week, which benefits low-income families and was approved by the Legislature over a decade ago but has never been funded.
Stokesbary said funding that tax rebate is a better way to address “any perceived tax inequities” than a capital gains tax such as Inslee’s proposing.
The 9 percent tax would apply to capital gains earnings above $25,000 for individuals (twice that for joint filers) on sales of stocks, bonds, and other assets. It’s billed as a way to shift some of the state’s tax burden to its wealthiest residents. Republicans consistently object to the idea, in part saying it violates the state constitution by introducing an income tax.
Republican leaders agree on some of the governor’s priorities, such as finding a way to avoid unemployment insurance rate increases. Urgent help is needed for businesses, they say, but Inslee’s push for $100 million in business grants early in session isn’t enough.
In his proposal, Inslee also included $100 million in rental assistance. But he did not include early relief for schools, which some legislators and stakeholders have called for. Schools are anticipating a drop in funding due to decreased enrollment during the pandemic, and the governor proposed to redirect some of those savings back to schools for addressing lost learning hours.
Stokesbary said he was “cautiously optimistic” about the governor’s approach to that issue, and that it’s hard to see exactly how school budgets are being affected right now. He thinks that data will drive how the Legislature writes the K-12 budget.
In response to a reporter’s question about what early action they believe is needed, Wilson said she’s looking at providing relief for the unemployment insurance rate increase out of the Rainy Day Fund early in session. Minority Leader Rep. J.T. Wilcox, R-Yelm, said Republicans have been calling for a special session for months to take action and that Rep. Drew MacEwen, R-Union, has already prepared a package of bills to help businesses.
That package of five bills has been prefiled.
“This is to provide immediate relief to businesses that helps their bottom line so that hopefully they can stay in business and continue to weather this storm also while minimizing the impact to the operating budget,” MacEwen said in a phone interview. Strategies in the bills include delaying due dates for taxes and fees, prohibiting an increase to unemployment insurance rates, and a business and occupation tax credit out of the Rainy Day Fund, he said.
When looking to fund the priorities they agree with, specifics are sparse but the legislators mostly point to existing projected revenues and the Rainy Day Fund and say they’re confident money is there.
“We have a very robust budget, our economy is amazingly resilient in the face of a worldwide pandemic, thanks to the wisdom of the voters, we have a large Rainy Day Fund. We have everything we need to address our challenges without new taxes. It’s as simple as that,” new Senate Minority Leader John Braun, R-Centralia, said.
Stokesbary pointed out that the governor had agencies put together proposals for reductions, not all of which are good ideas but some of which could be ways to save money on existing programs.
Inslee’s staff said the GOP response was not unexpected.
“None of the rhetoric we heard today was surprising or out of character for the current GOP,” Inslee spokesperson Mike Faulk wrote in an emailed response. “We look forward to further demonstrating the merits of the governor’s budget proposals, which try to help all Washingtonians.”
This story was originally published December 18, 2020 at 1:29 PM.
.jpg)