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Dear Friends and Neighbors,
The Economic and Revenue Forecast Council released its new revenue forecast on Monday. You can view it here. In a nutshell, state revenues increased by $194 million for the current 2021-23 budget cycle, but decreased by $483 million for upcoming 2023-25 budget cycle. It also decreased by $541 million for 2025-27.
This is a good news, bad news situation. Budget writers should be cautious about spending every dime the state has. With inflation still running at historic levels, and high food and fuel prices, many families are struggling to make ends meet. Things happening on the international and national level have the ability to impact our state and local economies as well. Lawmakers would be prudent to refrain from creating new programs that dedicate large amounts of money we may have now, but may not have later due to a potential recession.
As a member of the House Appropriations Committee, I continue to urge caution to my legislative colleagues. I remind them that state spending has more than doubled over the last 10 years. How many of you have had your take-home pay double in the last 10 years? The state needs to get a grip on spending and put more aside for a rainy day.
Senate Democrats released their two-year operating budget this week, while House Democrats unveil their budget on Monday. There will be alterations and tweaks, but usually they “buy” each other off – that is, the final budget most likely is larger than either the original House or Senate proposal.
House Republicans will offer amendments in committee and on the House floor to shift spending to our priorities or to rein in spending. Most likely, our input will not be taken by the majority party.
I believe the state has more than enough money to take care of our citizens' needs and put plenty aside for a rainy day. Spending every dime we have now will only cause broken promises and either cuts in programs/services or tax increases in the future.
State Supreme Court rules on capital gains tax
The Washington State Supreme Court reversed a lower court decision and ruled the new state capital gains tax was a constitutional excise tax. The opinion was released this morning. I voted against this bill in the 2021 legislative session.
It is extremely disappointing and beyond frustrating that our court would rule in a fashion that goes against every other state's interpretation of this issue, as well as the IRS's! It has always been my fear that once the majority party got their foot in the door, they would continue to make it impact more and more people. “Tax creep” is a real thing, folks.
Here are a few stories on this issue:
- WA Supreme Court rules capital gains tax is constitutional | Crosscut
- Washington Supreme Court upholds capital gains tax | AP/The Columbian
If you have any questions or concerns about the state budget, or just want to express your thoughts, please feel free to contact my office. It is an honor to serve you.
Sincerely,
Joe Schmick
