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Dear Friends and Neighbors,

Last week we talked about the Senate Majority Coalition Caucus budget proposal.  This week, House Democrats released their operating budget plan for the next two years.  While both proposals spend nearly identical amounts on K-12 education, the path to get there is very different.

Are you ready to pay $8 billion in new and increased taxes over the next four years?
You read that right.  Despite nearly $3 billion more in tax revenues this budget cycle (in some parts of the state, our economy is growing), House Democrats propose to raise taxes by $8 billion over the next four years.  They want to raise the B&O tax on many service businesses like residential mental health and substance abuse facilities, hospitals and grocery distribution.

But more onerous is their plan to impose a capital gains income tax.  They call this an income tax on “high earners,” and point out we're one of nine states in the nation that don't have this tax on capital gains.  The other thing those nine states don't have?  A state income tax.  There is no doubt in my mind that if Democrats succeed in implementing an income tax on capital gains, it's only a matter of time before that trickles down to everyone via a statewide income tax.  If you'd like to read more about the problems of a state income tax, you can read a Washington Policy Center brief here.

Growing state government faster than taxpayers can pay for it
In the 2011-13 biennium, our state operating budget was $31 billion.  If the House Democrat budget plan is implemented, our operating budget in 2019-21 will be more than $51 billion.  That's a $20 billion increase in just eight years!  Their plan grows government by 34 percent in the next four years.  Are you and your family going to see a 34 percent increase in your take-home pay over the next four years?

The House Democrat budget funds a lot of good things – things that would be great if we had the money.  But their “can't-say-no” approach is fiscally irresponsible.  One of the things I hear from you is that you don't want tax increases and you want state government to prioritize spending and live within its means.

If you'd like to see a direct comparison of the two budgets by non-partisan staff, click here.

When “wish lists” are confused with “budgeting”
I want to point out one very important fact.  The House Democrat budget that was passed off the House floor on Friday does NOT include the tax dollars to pay for it.  It truly is a “wish list.”  Democrats have no intention of taking the votes to pass the new and increased taxes.  When you confuse “wish lists” with “budgeting,” I think we have a problem.

We introduced an amendment on the House floor that would require budgets to be based on “existing revenues” so that we get away from budgeting on the tax dollars we wished we had rather than the state revenues that are in the bank.  The amendment failed on a party-line vote.  But this issue is not dead.  My House Republican colleagues and I will be introducing legislation next year and will work to make this important taxpayer protection a reality.  Fiscal responsibility and sustainability are something we need to improve upon in state government.

Now that both chambers have passed their budgets the real negotiations can begin.  We have three weeks to hammer out our differences and pass a budget that funds basic education, funds public safety and protects our most vulnerable.  I strongly believe we need to finish in the constitutionally mandated 105 days of session.  The people are getting tired of legislators going into overtime with special session after special session.  And I am too.

Thanks for reading my updates.  And thank you again for the honor and privilege of serving you in Olympia.  Let me know if you have any questions or concerns.


Joe Schmick

State Representative Joe Schmick, 9th Legislative District
426B Legislative Building | P.O. Box 40600 | Olympia, WA 98504-0600
360-786-7844 | Toll-free: (800) 562-6000