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Dear Friends and Neighbors,

After months of negotiations, the Legislature passed a budget last week that increases spending for education, kept state government from a partial shutdown, and includes new investments in mental health services.

Some of you have told me you're frustrated with how long the negotiations took, how fast the process moved at the end, and the lack of transparency surrounding the final budget.  I want you to know, I couldn't agree more.  Many of us expressed those same sentiments towards our leadership, toward budget negotiators and toward the press.  And it's not that those words fell on deaf ears; they didn't.  But when we left Olympia at the end of the 105-day regular session, the proposal on the table by House Democrats included $8 billion in new and increased taxes over the next four years.  That was unacceptable to me and my colleagues.  You elected me to fight for you, not to cave to outrageous demands for more of your hard-earned money.

Final compromise budget
The budget that passed the Legislature appropriates about $43.49 billion over the 2017-19 biennium and about $49.59 billion in the 2019-21 budget cycle.  This represents an increase of about 13 percent and 14 percent, respectively.  I don't believe this level of spending is sustainable.  I understand the need to spend more on education, and am willing to see more investments in beginning teacher salaries, but with this budget, state spending is growing much faster than the incomes of those required to pay for it.  It is unsustainable.  For reference, our two-year state budget for 2011-13 was about $31 billion.

While I'm glad that the final budget didn't contain the capital gains income tax, the carbon tax, or the B&O tax increases that the governor and House Democrats originally wanted, I am frustrated that new and increased taxes were included.  A tax on bottled water, self-produced fuel, online sales tax, and other proposals were needed to help balance the books.  Once again, our state government is not living within its means.

(I should note that rural legislators fought hard against increases in agriculture taxes and fees, including fertilizer and agriculture crop protection products.  This is a win for our farming and agriculture sectors.)

Much is being made of the historic McCleary fix that included a “levy swap” that sought to create a more equitable property tax system.  The discrepancies between property-poor and property-rich districts was a key point in the McCleary ruling.  The idea was to replace most of the local levies with a statewide increase in the property tax and then cap the amount of local levies and strictly define what they can be used for.  While I supported the concept overall, some of the smallest school districts didn't see the additional monies like other districts, and some of those districts will actually see an increase in their property tax bills.

Local governments also took a hit with this new budget agreement as the state is now keeping excess marijuana revenues instead of giving that to local governments who are on the frontlines dealing with the potential issues of legalized pot.  The suspension of PILT (payment in lieu of taxes) monies is also a blow to local municipalities.

While I understand a compromise budget will have many things to like and many things to not like, I feel the unsustainability of this budget and the new taxes, coupled with the blow to local governments and small school districts, were reason enough to vote NO.  I would have liked to see more progress on these important issues.

If you want more specific information about the compromise budget, you can find the bill, a detailed summary, agency details and other documents here or a copy of the nonpartisan committee staff summary here.

Hirst Update
The governor and many urban legislators don't feel inclined to help out the thousands of land owners around the state devastated by the state Supreme Court's Hirst decision.  We're already seeing property devaluations and the inability to build as water becomes effectively unavailable for property owners who intended to drill permit-exempt wells.

What's dumbfounding is their inability to see how the property tax shift will impact local governments and urban home owners.  As rural land loses its value, there will be a shift in the property tax burden to urban dwellers in the same county.  Local government services will be impacted as their revenue streams dry up and rural economies will be severely hampered by reduced construction and other economic activity.

Knowing we have to have a Hirst fix, Senate Republicans have said from day one that there would be no capital budget (the state's construction budget) without a Hirst fix.  The capital budget contains construction projects, infrastructure improvements, environmental programs, and other long-term projects.  Despite much complaining from the other side, Senate Republicans are holding firm.  Our rural areas must have a Hirst fix!  Doing nothing – or even trying to apply a temporary Band-Aid – is not an option.

The third special is ongoing and legislators may be called back to Olympia within the next few weeks to finalize a Hirst fix.  I'll keep you updated.

Please let me know if you have questions about state government, the legislative process or the 2017 session(s).  Also let me know if you have community functions or organizations you'd like me to attend, or if you are in need of a guest speaker.  I'm happy to help and here to serve.

Thanks for reading my e-newsletter and for staying involved.


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