Both the House and Senate have now passed versions of the 2019-2021 operating budget.
The House Democrats released their budget first. They are proposing a $53.2 billion operating budget, up from 19 percent from the current budget. The House Democratic budget seeks to create new taxes and raise existing taxes. Their proposals calls for the implementation of a $2.7 billion income tax on capital gains, a $1.05 billion increase in the business and occupation (B&O) tax, and a $320 million increase in real estate excise taxes. This is on top of repealing $140 million in tax incentives.
The House Democratic operating budget plan also assumes an increase of the local property tax levy lid, which could account for as much as $1.3 billion in taxpayer dollars yearly. The House budget also assumes a 0.58 percent increase in long-term benefit payroll taxes, an extra $1.1 billion dollar increase per year.
The Senate Democratic version of the Operating Budget passed by the Senate yesterday is a more realistic proposal, and clearly more respectful of taxpayers than the House proposal. It steers clear of taxes supported by House (income tax on capital gains and B&O tax increase in particular) but it does raise some new taxes. You can read more here. While there is much to like about the Senate version of the budget, I voted against it because it does rely on some higher taxes.
We have extraordinary surplus revenue this biennium thanks to a great economy. We are in the best spot in this century to write a budget that funds key priorities like education and mental health—without new taxes.