The fourth quarter of this legislative session hasn’t started off well for the state Senate’s majority Democrats.
Republicans put a no-new-taxes, no-cuts, sustainable operating budget proposal in front of them. They all voted no and instead went with their own proposal, which overspends and relies on the largest package of tax increases in state history.
Next, a total of 43,153 people signed in as “con” at the public hearing on one of those tax increases: Senate Bill 5798, which would impose the largest property-tax rate increase of this century.
To call that record-breaking is an understatement. No bill before a Senate committee had topped 10,000 opponents since anyone started keeping track.
Then, Gov. Bob Ferguson weighed in. He had essentially cautioned Senate and House Democrats against adopting budgets that depend heavily on the so-called “wealth” tax. They did it anyway.
The governor called a news conference to announce neither Democratic budget is close to something he would sign. Both include “far too much” in new taxes, he said, in addition to the wealth tax.
Ferguson also supplied some clarity by listing five things he wants to see in a budget. All have a conservative ring to them, like protecting the state’s rainy-day fund, minimizing new spending, and maximizing savings. Also, $100 million for law-enforcement hiring is still a priority for him.
The Senate Democrats’ plan checks just one box. The House Democrats’ budget checks another.
The only budget on the table that meets all the Ferguson criteria is the “$ave Washington” budget proposed by Senate Republicans. It’s the no-new-taxes, no-cuts plan Senate Democrats could have adopted, but didn’t.
With three weeks left in the regular session, there is ample time for Democrats to pay more attention to the governor’s checklist, revise their proposals accordingly, and pass them back and forth between the House and Senate chambers — out in the open — until one proposal attracts enough votes to pass. That’s the right way to do it.
Democrats have chosen the other way. They’re using the Legislature’s “conference” rule to take the budget negotiations behind closed doors. This effectively means the Democrat budget teams from the Senate and House will allocate close to $80 billion in taxpayer dollars however they see fit.
When those four Democrats emerge from the proverbial back room, probably with just a day or two left in the session, it will be with a budget no one has seen. There will be no public hearing, and no amendments will be allowed. Legislators will get an up-or-down vote on accepting the “conference report,” meaning the backroom budget. That’s it.
The conference rule has its place, but not this time. Subtracting the “wealth” tax, to avoid the governor’s veto pen, blows a $12 billion hole in the Senate Democrats’ budget. That means big changes are coming on the tax side, the spending side, or both. Those changes should be made out in the light, not in secret.
What the Democrats call a wealth tax is really a new, untested and possibly unconstitutional kind of property tax. Republicans see it as a tax that could drive away the kind of innovators and business leaders that have helped make our state what it is.
It’s good to have the wealth tax off the table, but that still leaves an expanded jobs tax and another billion dollars’ worth of other tax-policy changes in the hands of Senate Democrats.
The House budget includes an expanded business tax, and the highly unpopular property-tax proposals are in both Democratic plans.
At his news conference, the governor declined to commit himself about increasing the jobs tax or property taxes. Then a reporter asked if Ferguson is concerned about how a property-tax hike could affect the cost of housing, which is a leading cause of Washington’s affordability crisis.
“I have concerns about any revenue source,” the governor replied, “and what that means for businesses, for Washingtonians, you name it. I have concerns.”
If Jay Inslee ever had concerns about piling more taxes on the people of our state, I don’t recall him saying so publicly. In that sense, Ferguson’s candor is encouraging all by itself.
However, the governor also took aim at Washington’s tax structure, repeating the “too regressive” line we regularly hear from Democrats and adding that he’s not opposed to changes in tax policy that would make the system “more fair.”
Let’s flip that around. What about changes that make the system less fair — like the proposed property-tax increases? They’re regressive by definition, hitting lower- and middle-income people harder whether they own or rent.
House Bill 2049, in the House Democrats’ tax package, would allow a tripling of the annual growth of property-tax rates. It’s basically the bill Republicans beat back in the Senate a year ago, except for new language that would let school districts pursue larger levies.
The House proposal would be bad. This year’s Senate proposal is worse, as the record level of citizen opposition confirms.
SB 5798 would uncap the annual growth of property-tax rates, tying them to inflation plus population growth. If this policy had become law a decade ago, your property taxes would be 50% higher today than they are!
It’s important to remember the 1% cap on the annual growth of the property-tax rate applies only to increases approved at the council or commission level.
Governments have always been able to exceed the 1% limit if they get approval, in an election, from a majority of those who pay the tax. Supporters of the property-tax increases don’t like to admit that. It would make their lives much easier — and yours more expensive — if legislators would just lift or toss the 1% cap instead.
Democrats have done a great deal of messaging about their plan to make the wealthy in our state pay more. They should be nervous about pushing a regressive tax hike that will hit lower- and middle-income people hardest.
Remember also how Governor Ferguson sees the tax code as being too regressive already. It would be appropriate for him to come out against any effort to increase property taxes.
In the meantime, as we get deeper into the session’s final quarter, the best-available base for a budget that addresses the governor’s concerns is the Senate Republican plan. More than ever, it’s the right path.
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Sen. John Braun of Centralia serves the 20th Legislative District, which spans parts of four counties from Yelm to Vancouver. He became Senate Republican leader in 2020.
