EYE ON OLYMPIA: House, Senate move toward budget package

OLYMPIA — The 24th Legislative District’s representatives voted in favor of the House’s two-year $44.9 billion state budget that seeks to spend an additional $1.9 billion on education to address a Supreme Court mandate on education funding.

The spending plan passed the Democratic-controlled chamber along party lines on a 50-48 vote Friday.

From District 24, which includes Clallam and Jefferson counties and part of Grays Harbor County, Rep. Mike Chapman, D-Port Angeles, and Rep. Steve Tharinger, D-Sequim, voted in favor.

The chamber did not vote on the $3 billion in new taxes the budget seeks, including a new capital gains tax. Those bills will get a public hearing this week.

Senate Republicans passed their own proposal two weeks ago. That plan relies on a new state property tax that would replace local schools levies.

Both chambers must now begin the work of negotiating a final compromise to satisfy the state Supreme Court’s McCleary decision on education funding.

The House plan would spend about $1.6 billion more than the $43.1 billion passed by the Senate two weeks ago. The two chambers’ plans would put about the same amount, $1.9 billion, into education funding.

The House budget includes $682 million in pay raises for state workers that Gov. Jay Inslee negotiated with state workers last summer, but that was rejected in the Senate version.

The Democrats also would freeze tuition at state four-year colleges and add $153 million for mental health care.

In contrast, the Senate plan would link tuition rates to increase in average state wages. It would add only $95 million to mental health.

The House did not vote on funding the spending plan. Those bills are expected this week.

Funding bills

To pay for its proposal, the House is expected to seek a 20 percent increase of the business and occupation tax on the state’s highest grossing businesses, which would raise $1.2 billion over the next two years from about 72,000 businesses.

Small businesses would be exempt from the tax. The plan also gives a $100,000 tax deduction to businesses with taxable revenue of $250,000 to $500,000.

The plan also would levy a 7 percent capital gains tax on earnings from the sale of stocks, bonds and other assets above $25,000 for individuals and $50,000 for those who file jointly.

About 48,000 people would be affected by the new tax, lawmakers said. Retirement accounts, most primary residences and most agricultural lands and most timber would be exempt from the tax, as would the sale of cattle, horses or breeding livestock.

Under the Senate plan, much of education would be paid for under a new state property tax that would replace local levies. It would be transitioned in next year and be implemented Jan. 1, 2019.

It is expected that levies would rise in some places, such as Seattle, and decrease in others at $1.55 per $1,000 of assessed value.

In the first year of the Republican plan, school districts would be funded solely by the state property tax.

In the second year, which would be 2021, districts would be allowed to propose local levies of up to 10 percent above the state property tax.

No fair for fairs

One thing the House budget does not include is $4 million for county fair funding.

Chapman admitted that while county fairs might not be a big priority for his city and suburban colleagues, it’s a big deal in the 24th District. County fairs in Clallam, Jefferson and Gig Harbor counties are a “huge issue for me,” he said.

The representative said Saturday that he voted for an amendment that would have put the $4 million back into the budget, but it failed on a tie, 49-49.

The good news, said Chapman, is that the $4 million is in the Senate’s version of the budget. He is “pretty confident we’ll get the money back in the final budget.”

Failing that, Chapman said that he has talked with Tharinger, who might be able to work county fair funding into the capital budget.

“I look forward to working with Sen. [Kevin] Van De Wege [D-Sequim] and Rep. Tharinger to secure fair funding in the final budget this year,” he added.

Capital budget

While all eyes are on the state’s operating budget and public education funding, the Senate passed a two-year $4 billion capital or construction budget last Thursday.

About $1.1 billion of the money would go toward constructing, renovating and modernizing K-12 education facilities, including small, rural school districts, skill centers and K-3 class-size reduction.

Van De Wege touted the Senate capital plan, which includes millions for District 24:

• $1 million in Youth Recreational Facilities grants for the Port Angeles unit of the Boys &Girls Clubs of the Olympic Peninsula.

• $1 million in dental capacity grants for the Jefferson County Healthcare Dental Clinic in Port Townsend.

• $699,000 in dental capacity grants for Volunteers in Medicine of the Olympics of Port Angeles.

• $160,000 for improvements to the Captain Joseph House Foundation in Port Angeles.

• $338,000 in Heritage Capital grants for the capstone phase of the Adventuress Centennial Restoration Project.

• $643,000 in Heritage Capital grants to rehabilitate Fort Worden’s warehouses.

• $649,000 in Wildlife Recreation grants for Spruce Railroad Trail and Daley Rankin Tunnel restoration.

Tharinger chairs the House Capital Budget Committee.

The House capital budget is currently in discussions in the Finance Committee, which is expected to send it to the Rules Committee this week.

Chapman and Tharinger have said that rather than seek a floor vote immediately, it’s more likely that House and Senate negotiators will work out a compromise capital budget as an intermediate step.

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Assistant Managing Editor Mark Swanson can be reached at 360-452-2345, ext. 55450, or [email protected].

The Associated Press contributed to this report.

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