The Washington Senate on April 4 voted 31-17 to approve a $52.2 billion 2019-21 operating budget. Although state senators approved a version of ESHB 1109 that spends less than the original House proposal, it still represents $7.5 billion increase in spending from the 2017-19 biennium.
Negotiations over the differences between the House and Senate versions could decide whether to include a capital gains income tax proposal that received an April 4 public hearing in the House Finance Committee.
However, some lawmakers expressed their reservations with the current budget as is, due to the new taxes that are included despite the state’s record surplus revenue. The most recent report from the state Economic and Revenue Forecast Council estimates that the state will receive $50 billion for the 2019-21 biennium compared to $45 billion in the 2017-19 biennium.
“Why are we spending so much money?” Sen. Doug Ericksen (R-42) asked on the Senate floor. “When we have so much new tax dollars flowing into state coffers, we should be doing tax relief to the people of Washington state. It still is a budget that grows government as much as possible.”
While both House and Senate Democrat leadership have argued that the new revenue is not enough to meet existing obligations, including education spending, that viewpoint was challenged by Senate Ways and Means ranking minority member John Braun (R-20).
On the Senate floor, he said that he was “somewhat conflicted on this budget” because despite having the “best budget situation in the century…when we consider how to spend that money, we put things aside.
“But so do the other seven million people in our state. We need to make decisions about what is best for all the citizens, and I think we didn’t in this process. That said, I think there are some very good things in this budget.”
ESHB 1109 originally cleared the House Mar. 29 in a 56-38 vote. Almost 100 amendments were proposed on the Senate floor prior to the budget’s passage. One of them introduced by Sen. Mike Padden (R-4) would have assumed the passage of SB 5608 sponsored by Ericksen, which would lower the business and occupation (B%O) tax rate for manufacturing from 0.484 percent to 0.2904 percent. The amendment failed. Though opposed, Sen. Guy Palumbo (D-1) said “I hope one day we can have a comprehensive discussion about B&O so that we’re not picking winners and losers. I hope one day we can treat other small businesses the same way we want to treat manufacturing.”