OLYMPIA — With just 13 days left in this legislative session, progress seems to have slowed as negotiations continue on a biennial budget and a package to fund public education to satisfy the state Supreme Court’s 2010 McCleary decision.
Each of the state legislators from District 24, which includes Clallam and Jefferson counties and part of Grays Harbor County, is playing a role in the decision-making process. District 24’s legislators are Rep. Mike Chapman, Rep. Steve Tharinger and Sen. Kevin Van De Wege.
The Senate and House have passed spending bills that might or might not satisfy the Supreme Court. The Senate’s $43 billion bill includes paying for it with a new statewide property tax.
For its part, the House passed a $44.9 billion budget that Democratic leaders insist does not include many cuts to pay for education as they contend the Senate bill does.
The House bill would pay for its plan with $3 billion in new taxes, principally a 7 percent tax on capital gains — revenue derived from the sale of stocks and bonds.
Collection of the tax would rely on the taxpayers’ federal tax returns, where capital gains are reported.
The House would also propose a 20 percent hike on professional services and businesses grossing more than $250,000 a year. Real estate, too, would see an excise tax on the sale of homes valued at more than $1 million.
The House’s Finance Committee sent HB 2186, which contains the lawmakers’ revenue proposals, to the Rules Committee last Tuesday.
Will the House’s capital gains tax fly?
In its analysis of HB 2186, the House of Representatives Office of Program Research makes the case that a capital gains tax is essentially an excise tax similar to the 49-cent tax motorists pay on the sale of each gallon of gasoline.
“Most property owned by an individual for personal purposes is a capital asset, including a house, furniture, a car, stocks and bonds,” said the analysis. “The sale of these items may result in a capital loss or a capital gain.”
At the federal level, capital gains are reported as income, and therein lies a problem for the House plan because income taxes are prohibited by the state Constitution.
Chapman, D-Port Angeles, the assistant majority whip, said the House tax plan had a “legal review before it came out of committee.”
He emphasized that the House plan is a “voluntary tax — people don’t have to take a short-term profit.”
What the public is hearing right now, said Chapman, is “typical partisan politics” as the parties try to make their messages clear in public.
“Truth be told, even if we pass the [House] tax plan, I don’t think [the Senate] would want to negotiate over it,” he said. “I think the leaders of both parties should be working together.”
Chapman asked that the two parties “not argue in public. I don’t like arguing in public when you’re negotiating.”
Chapman and Tharinger both signed on to co-sponsor HB 2200, which would prohibit internet service providers from selling users’ history data to outside companies.
A companion bill, SB 5919, is making its way through the Senate.
The two bills were sparked late in this term after President Donald Trump signed into law a bill that eliminates privacy protections enacted during the Obama administration.
The House measure has “huge bipartisan support” said Chapman.
“I think both liberal Democrats and conservative Republicans disagree” with the federal changes, he added.
He was not sure that the privacy bill will make it through the Legislature in this term but offered hope that it can be tied to another bill.
House capital budget
Tharinger’s House Capital Budget Committee voted its work of many weeks to the floor for a vote or negotiation with the Senate on Friday morning.
HB 1075 consists mostly of school construction projects and funding for mental health facilities. HB 1080 provides general obligation bonds totaling $2.5 billion to pay for those projects. The two bills had bipartisan support in the committee votes.
Tharinger could not be reached for comment.
For both houses, transportation bills are written, negotiated and voted on separately from the state’s operating budget.
Van De Wege, D-Sequim, sits on the Senate Transportation Committee and announced that lawmakers in that house passed SB 5096, the biennial transportation budget, on Thursday.
As in all other measures, said Van De Wege, the House will pass its own transportation bill and the two houses will reconcile them.
What’s important for the North Olympic Peninsula is that funding for the U.S. Highway 101 Elwha River bridge design and replacement is in both versions, he said.
The only thing that might change the estimated $20 million to $30 million required would be if the state Department of Transportation needs to acquire land, but Van De Wege did not think that was going to be necessary.
“The Elwha River bridge is the biggest thing,” said the senator, who added that it’s “highly likely” the North Olympic Peninsula will get many projects included in the Senate bill:
• $3.2 million for maintenance to the MV Salish and $76,000 for maintenance to the MV Chetzemoka, ferries on the Port Townsend-Coupeville route.
• $1.2 million for two 30-foot electric buses for Port Angeles.
• $750,000 to study why salmon and steelhead are dying in the vicinity of the Hood Canal Bridge.
• $160,000 for a new park-and-ride lot for Clallam Transit riders in the Carlsborg-Sequim area.
• $91,000 to complete the widening of U.S. Highway 101 from Shore Road to Kitchen-Dick Road near Sequim.
• $25,000 for Ecumenical Christian Helping Hands Organization, known as ECHHO, a Port Townsend nonprofit that provides transportation to seniors and the disabled.
• $21,000 for a study of how to fix an unstable slope along state Highway 112 between Deep Creek and West Twin River.
• $18,000 for security improvements to the Port Townsend ferry terminal.
On the agenda
Wednesday is the cut-off day for Senate bills going over to the House for consideration and vice-versa.
The two houses are expected to end work early today for Passover, but Chapman expects long work days for lawmakers on Tuesday and Wednesday.
He still holds out hope for a budget agreement during the remaining days of the term.
After the end of the term, the party leaders from the two houses will meet to negotiate if needed, he said and will call the rank-and-file members in for votes until a budget is passed.
Assistant Managing Editor Mark Swanson can be reached at 360-452-2345, ext. 55450, or [email protected].