Dear Friends and Neighbors,
In late December, Gov. Inslee proposed an $8.7 billion tax package, with the bulk of revenue coming from a new carbon tax, a new capital gains income tax, and an increase in the state's business and occupation (B&O) tax on services. While the governor is required to propose an operating budget prior to each session to give lawmakers a starting point for ideas, many of the ideas the governor is proposing are simply not going to happen. There is no appetite for massive new tax increases.
Here is the breakdown of the governor's three largest tax increase proposals:
- Increase the B&O tax rate on services from 1.5 percent to 2.5 percent;
- Assess a $25/ton carbon tax on the carbon content of fossil fuels; and
- Impose a 7.9 percent tax on income from the sales of stocks, bonds and other assets.
If we're going to see sustained economic growth, we must focus on creating an economic environment that allows job creators to grow their businesses and attract talent. Increasing the B&O tax rate on businesses that want to hire new employees does not achieve that goal. Neither does creating a new carbon tax or capital gains tax.
When you add up all the tax increases that are part of the governor's plan, the result is the largest tax increase in Washington state history. House Republicans have entered this session the same way we have entered every session, with the belief that major new tax increases should always be the last resort. There is a lot of work to do, and all four caucuses will play a role in putting solutions on the table. Our caucus remains focused on realistic and practical solutions, not unrealistic proposals. We will continue to work hard to protect taxpayers and spend existing tax dollars wisely. That was just part of my message at Wednesday's media availability following the governor's State of the State address. You can watch the media availability by clicking the image below.
A word on Obamacare
There has been a lot of talk in Olympia lately about the fate of the Affordable Care Act (Obamacare) after President-elect Trump's victory in November. Whether the law is fully repealed and replaced, or some parts of it are kept, the fact is frustration has been building as deductibles and premiums have been rising. The status quo is unaffordable and unsustainable. We're going to monitor what happens in Washington, D.C. over the coming weeks and months, but the bottom line is Congress will soon be responsible for coming up with changes to a broken and collapsing system.
Changes may be coming to the GMA
The Growth Management Act (GMA) has frustrated many of us in rural communities for a long time. However, the Legislature may be on the cusp of creating changes to the GMA that would benefit our rural communities. Rep. Bob McCaslin's House Bill 1017, which received a hearing yesterday, would exempt school construction from certain GMA restrictions that prohibit the building of schools and school facilities in rural areas. The bill would return control to school districts, which would then be able to work with local authorities to permit new school construction projects. If we are truly serious about finding ways to have smaller class sizes in schools across our state, which we know benefits students and teachers alike, this bill should be supported.
Getting in touch
If you have any questions, comments or concerns, please don't hesitate to write, call or send me an email. My contact information is below. I look forward to hearing from you.