Ideological divide over general tax relief on display at Washington state legislative preview

Sen. Lynda Wilson prefers to put $4.5 billion of ending fund balance to work in the form of tax relief for Washington taxpayers.

Sen. Lynda Wilson prefers to put $4.5 billion of ending fund balance to work in the form of tax relief for Washington taxpayers

Brett Davis
The Center Square Washington

A Thursday legislative preview sponsored by the Washington State Association of Broadcasters and the Allied Daily Newspapers of Washington laid bare the stark difference of opinion between Democrat and Republican lawmakers on general tax relief.

The subject of broad-based tax relief, such as cuts in the state sales tax or lowering the property tax rate, came up at the gathering in the John A. Cherberg Building at the Capitol Campus in Olympia in the context of the current $64 billion state budget and Gov. Jay Inslee’s proposed $70.4 billion 2023-25 operating budget.

“We enter into this with about $6 billion in ending fund balance, and we have about $1.5 billion in mandatory costs and that’s net,” Sen. Lynda Wilson, R-Vancouver, said. “So that leaves us with about $4.5 billion to work with and that is certainly not the $15 billion that we had at the beginning of last year, but that’s still certainly a lot of money, and I think my caucus would put that toward tax relief.”

Wilson, the ranking member on the Senate Ways & Means Committee, sponsored legislation last session that exempted the first $250,000 of a primary residence from the state property tax. The bill didn’t make it out of committee.

Rep. Drew Stokesbary, R-Auburn, provided some context on the growth of the state budget over the years.

“With the governor’s budget proposal of over $70 billion, that means that the state budget has doubled since the time we [Stokesbary and Wilson] got elected just eight years ago,” the lead Republican on the House Appropriations Committee said. “I don’t know very many families that have seen their household income double over the last eight years. I don’t know very many small businesses who have seen their revenue double over the last eight years.”

Earlier in the legislative preview, Sen. John Braun, R-Centralia, commented on rising prices.

“The cost of food, of gas, of housing, of child care are frankly unaffordable for many Washingtonians today,” the leader of the Senate Republican Caucus noted. “Even if they could afford it six months ago just barely, today they probably can’t because of inflation.”

The current inflation rate in the U.S. is 7.1%.

Wilson indicated she thought broad-based tax cuts would be a no-go with Democrats this session.

“And I imagine in all likelihood the Democrats are not going to look at the tax relief that we’ve been looking at,” she said. “History tells us that.”

Sen. Christine Rolfes, D-Bainbridge Island, recognized the impact inflation is having on Washingtonians and pointed to targeted tax cuts going into effect this year as a means of relief.

“We also know that people are hurting with inflation right now,” the Democrats’ top Senate budget writer said. “That’s hitting every corner of the state.”

Rolfes went on to note, “I’m pleased to say that two years ago in bipartisan fashion we passed the Working Families Tax Credit. So that refund should be going out beginning in February, right when I think people need it the most.”

The Working Families Tax Credit will distribute $300 to $1,200 to those who qualify.

Rolfes also mentioned last session’s bipartisan passage of legislation eliminating the business and occupation tax for businesses making less than $125,000 in gross receipts. Gov. Jay Inslee signed the bill into law. It applies to tax reporting periods on or after Jan. 1.

“So entrepreneurs, mom and pop shops, will see that starting this month,” Rolfes said. “Quarterly payments for many will stop.”

Chair of the House Appropriations Committee Rep. Timm Ormsby, D-Spokane, explained his opposition to general tax relief in favor of measures focused on helping small businesses and “individuals that find themselves left behind, marginalized, underrepresented.”

He continued, “But I think from the Appropriations and spending side of things, our goal is to target investments to where they’re needed.”

Stokesbary was unimpressed by Democrats’ dismissal of broad-based tax relief and said as much.

“I would remind my friends across the aisle that if the sales tax is as regressive as it is claimed to be, and if the sales tax proportionally burdens the poor, then a sales tax cut is going to disproportionately help the poor,” he said. “It’s a simple mathematical tautology that I’m not sure the governor’s office understands. But I hope my legislative colleagues understand that if the sales tax disproportionately falls on the poor, cutting the sales tax will disproportionately benefit the poor.”

The 105-day legislative session starts on Monday, Jan. 9.

This report was first published by The Center Square Washington.

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