Dear Friends and Neighbors,
Only 23 days remain of the 105-day regular legislative session, and we have yet to see an operating budget proposal from the majority party. The latest news is we may finally see a budget next week. However, it is my understanding that the proposed biennial budget put together by the chair of the House Ways and Means Committee did not gain a lot of support from within his caucus.
I find it very troubling that we are 80 days into the session and the majority has not been able to reach agreement amongst themselves on a budget. With a little over three weeks left in the regular session, I think it would be irresponsible for the majority party to push the Legislature into a special session because it has been unable to make the difficult and responsible choices necessary to pass a balanced budget.
Recently, we have seen a slew of “title-only” bills introduced by Democrats that relate to a wide range of budget issues. Title-only bills have no content — just a title, which acts as a placeholder for language that could be attached later. For example, Senate Bill 5902, has no bill language at all, and the only thing listed is the title, “Relating to creating the revenue and taxation act of 2011.” Often, the public, and sometimes the minority party, has no idea what will be added to these bills until the last moment, leaving little or no opportunity for input. The Columbian’s editorial on March 25 summarized it well: In Our View: Greasing Skids.
Four of the title-only bills introduced relate to the “creation of revenue and taxation acts,” which means they could be amended to increase taxes. With the passage of Initiative 1053, and any new taxes would still require a vote of the people or a two-thirds supermajority approval in both chambers of the Legislature to pass.
Closing tax preferences part 2
Last week, I mentioned the many communications we are receiving requesting us to close the so-called “tax loopholes” to balance the budget. As I pointed out, many of these go to important items such as food and prescription drugs. Some of these preferences should be referred to as “job creating tax incentives” because without many of them, jobs would have never been created and many projects never constructed.
I agree there are some incentives out there that could be removed. This week legislation was introduced to examine some tribal tax preferences. House Bill 2045 would address the following tax preferences:
- Fuel Taxes: In 2007, the state changed the way it taxed gas sold by tribal stations. Instead of keeping all of the gas tax to help build and maintain highways, the new law allowed tribes to keep 75 percent of the money. In other words, the state fuel tax at a non-tribal gas station is 37.5 cents per gallon, but just 9.375 cents at a tribal station. This preference costs the state $47 million every two years.
- Cigarette taxes: Currently, the state gets a share of the taxes charged on cigarettes from just one tribe, the Puyallups. If we were to require all of the tribes in Washington state to give us just 30 percent of the cigarette taxes they collect, we would receive as much as $60 million every two years in new revenue.
- Property taxes: Non-trust lands, or land not located on a reservation, owned by tribal governments are exempt from property taxes, even though they may be located right next to privately-owned property that is taxed. More than $146 million worth of property is untaxed, despite being located right next to privately-owned property that is taxed. Closing this preference would bring in $3 million every two years.
Closing these tax preferences could bring in $110 million every two years for education, public safety and services for the most vulnerable.
Gaming industry legislation
Two other bills have been introduced that would address preferences for tribes, but these relate to the gaming industry. House Bill 2044, which has bi-partisan support, would allow about 65 current non-tribal, house-banked card rooms to upgrade from pull tabs to electronic scratch ticket machines. Currently, only tribal casinos can operate the machines, also known as video lottery terminals. This bill would level the playing field between Washington’s gaming industry.
Some feel tribes have a monopoly on this market and it is not fair or equitable. Allowing existing non-tribal card rooms to upgrade their gaming facilities would allow them to adequately compete with tribal gaming activities. Only house-banked card rooms with five years of experience would be able to upgrade their gaming under the measure. No more than 200 machines would be allowed per location, or no more than 7,875 machines statewide.
The bill could provide about $290 million in revenue to the state, without any increase in taxes. Under the measure, revenue from new non-tribal gaming activities would be required to be distributed as follows:
- 50 percent to fund K-12 education;
- 30 percent to fund services for the most vulnerable; and
- 20 percent to fund public safety.
Any transfers from the dedicated accounts would require a 60 percent vote of the Legislature. Local governments would also receive a portion of the money paid to fund core services.
House Bill 2046 relates to legislative involvement with gaming compacts and compact amendments.
Workers’ compensation reform update
We are still waiting for a vote on workers’ compensation reform, preferably Senate Bill 5566. That is the compromise bill passed in the Senate with strong, bipartisan support. I mentioned in my video update that the Senate was able to get it done, the governor is on board, and apparently there are enough votes in the House to pass the bill. Unfortunately, Democratic leadership continues to refuse to bring the bill to the House floor for a vote.
Both the Everett Herald (At least allow House to vote) and the Seattle Times (Workers’ Comp Reform deserves House vote) editorialized this issue is important enough that at the very least a vote should be allowed. The Columbian also weighed in on workers’ compensation recently with an article that examined some of the reasons for Washington’s troubles, including fraud and abnormally high pension awards.
Next week, we hope to have more of an update on the budget situation for you. Please keep in touch.
Thank you for allowing me to represent you in Olympia.