PORT ANGELES — New revenue proposals by the state Legislature rely on tax increases that are expected to bring about $12 billion over the next two budget cycles.
State Sen. Mike Chapman, D-Port Angeles, said this is likely only the first of many years of tax increases as the state works to provide services to residents.
“The needs and demands on the state continue to grow,” Chapman said during a Coffee with Colleen event on Wednesday. “If people think this is the only round of tax increases, that’s just not going to happen.”
The increased revenue garnered by new taxes will go toward addressing a projected $16 billion budget shortfall over the next four years.
State Rep. Adam Bernbaum, D-Port Angeles, said he hopes balancing this biennium’s budget will set the government up to avoid shortfalls in the future. However, he noted changes at the federal or global levels could change that.
For this session’s revenue plans, the taxes proposed by the House and Senate will result in “increased taxes probably for just about everybody in the state of Washington,” Chapman said.
Some tax proposals include an across-the-board Business & Occupation tax increase, the rollback of significant tax breaks for a variety of institutions and more, Chapman said.
The Senate and the House also are proposing a 6 percent or 9 percent gas tax increase, respectively, to increase revenue that would help the transportation budget address its increasing construction costs that correspond with decreasing gas tax revenue.
Both revenue proposals from the chambers also include increasing the property tax cap from 1 percent to 3 percent.
The three North Olympic Peninsula legislators differ on their support for these proposals.
Chapman and Rep. Steve Tharinger, D-Port Townsend, said they support the plan; Bernbaum opposes it.
“This is a tough one for me,” Bernbaum said. “I know that, at the local level, the municipalities and the counties really do need that revenue to balance their budgets.”
At the beginning of his campaign, Bernbaum said he supported the proposal. However, after talking to senior citizens on fixed incomes who live in manufactured home parks or apartment complexes, he said he changed his mind.
Because those individuals rent and do not directly pay property taxes, they would not be eligible for senior property tax exemptions. However, Bernbaum said the property owner would likely pass those costs on to renters, and that “would be really challenging to absorb” for a lot of people.
If there were progressive changes to property taxes, such as homestead exemptions or exemptions for the first $200,000 of a home’s value, then Bernbaum said he would be “more than happy” to support raising the property tax cap.
In its current form, however, he said he would not vote for it.
While March’s House and Senate revenue proposals included a tax on those who have more than $50 million, that idea was shot down by Gov. Bob Ferguson. This round of budget proposals does not include a wealth tax, but Chapman said the mechanism may still have a path forward through the use of a referendum clause.
That would allow a measure to go straight to voters for approval, rather than to Ferguson.
“I would assume that tax would pass quite easily in Washington state,” Chapman said, noting he supports a wealth tax.
Whatever revenue package makes it out of the state Legislature must be approved by Ferguson.
“The governor is pretty tight-lipped, so I think the Legislature’s flying a little blind as to what he will or won’t sign,” Chapman said. “If he vetoes revenue, then he has to make the corresponding budget cuts.”
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Reporter Emma Maple can be reached by email at emma.maple@peninsuladailynews.com.
