Establishing Fair Revenue
Promote a balanced, fair, adequate, and flexible tax structure as well as the establishment of a public bank.
Issue Team Chair: Cynthia Stewart, firstname.lastname@example.org
Right Now in Adequate and Fair Revenue and Budget
(Interested in the 2020 Session Recap? Click Here)
The first year of each biennium, the Legislature adopts a new biennial budget. It also makes changes to the current biennium because of new circumstances. This year, those circumstances include COVID and its impacts on the economy of the state. In each case, the Legislature begins with consideration of the Governor’s proposal and then moves on to developing its own packages. This week, public hearings were already held on the Governor’s proposed operating and capital budgets and the new proposed capital gains tax, which would help support the proposed expenditures. These issues will continue to be discussed for a period of time until the Legislature has its own packages ready. The Legislature may approve a capital gains tax relatively soon in order to help estimate how much money is available for the spending budget, but the appropriations will not be adopted until after the next economic forecast on March 20.
Other tax measures that could be adopted are described in the preliminary report from the Tax Structure Work Group, which analyzes various tax options; but there is no recommendation at this time. However, it adds several types of taxes to the mix for consideration next year that have not previously been on the table before, such as value-added tax, margins tax, corporate net receipts tax, bordering states tax and more. Most of these will not be in proposed legislation this year but the report is worth reading.
Other tax issues that have already emerged include a number of bills that would give local jurisdictions additional options and flexibility among funding sources for affordable housing, shelters, parks and other needs.
The League is also monitoring a public bank bill to determine whether what has been introduced fits the criteria established by League.
Bills the League Supports
HB 1002, Relating to providing a business and occupation tax exemption for qualifying grants related to COVID-19 would exempt income from federal COVID relief grants from the state Business & Occupation tax.
HB 1025/SB 5006, Relating to local parks funding options, would give local jurisdictions the option of levying a 1/10 of one percent sales tax if approved by the voters to support park development commensurate with population increases and address the revenue shortfalls these jurisdictions have experienced because of the COVID pandemic.
STATUS UPDATE: SB 5006 will have a public hearing on January 19 in the Senate Housing & Local Government Committee at 8:00 am. HB 1025 will have a public hearing on January 21 in the House Finance Committee at 8:00 am.
HB 1069, Concerning local government fiscal flexibility would add housing and homelessness to the permissible uses for a portion or all of a variety of local option taxes (criminal justice sales tax, criminal justice assistance account, lodging tax, REET, property tax levies, utility liens.
STATUS UPDATE: This bill has had a public hearing and committee vote, which will be reported out soon.
STATUS UPDATE: SB 5083 had a public hearing on January 12 and HB 1080 had a public hearing on January 14 but neither has yet been considered in executive session and both will likely be replaced by legislative proposals.
STATUS UPDATE: SB 5091 had a public hearing on January 12 and HB 1093 had a public hearing on January 14 but neither has yet been considered in executive session and both will likely be replaced by legislative proposals.
STATUS UPDATE: SB 5092 had a public hearing on January 12 and HB 1094 had a public hearing on January 14 but neither has yet been considered in executive session and both will likely be replaced by legislative proposals.
SB 5096, Concerning an excise tax on gains from the sale or exchange of certain capital assets (capital gains tax).
ACTION ALERT: Click on our Action Alert to ask your representatives to support SB 5096.
Bills the League Is Watching
HB 1111, Concerning investment income tax deductions. This bill needs additional analysis.
HB 1081, Concerning state general obligation bonds and related accounts. This bill sets the bonding authority for the biennium and will be modified once the capital budgets have been approved.
HB 1095, Concerning the taxation of governmental financial assistance programs would exempt grants associated with a federal emergency from B&O and other taxes. This is a very complex set of exemptions that needs additional analysis.
SB 5188, Concerning the creation of the Washington state public bank. This bill would establish a cooperative bank that would provide opportunities for state, local, and tribal government entities to competitively finance a broad array of public infrastructure and economic development projects, including housing, at competitive rates with low administrative costs and fill gaps that the current banking system cannot or will not fill. This bill has not yet been scheduled for public hearing. Analysis will determine the League’s ultimate position on the bill.
Bills the League Opposes
None identified at this time.
How Local League Members Can Be Involved