Letter from Olympia

Dear Neighbor,

This has been an exciting week in Olympia. On Monday, I welcomed my wife Erin and daughter Clara to the Capitol for Children’s Day. It was wonderful to have them join me on the Senate floor with other family members!

Budget update

We are starting this budget year in a great position, thanks to an overall strong economy that raises expectations for state revenue in the 2019-2021 biennium to more than $50 billion! To put that in perspective, when I first started in the legislature in 2011, revenues were just over $30 billion—we’ve come a long way in a short time. Even with huge revenue growth in our state, the governor is proposing that we raise taxes by implementing a capital gains tax and increasing the business and occupational (B&O) tax. We are in the best spot in six years to write a budget within our means and make significant new investments in things like mental health and drug treatment. This is not a time to raise taxes.

An income tax on capital gains could face constitutional problems, just as a state income tax has in the past. Voters have repeatedly rejected income tax proposals. The migration to states without an income tax is higher than to states with an income tax. It seems that there is a correlation between no income tax and economic prosperity.

Additionally, the governor is proposing an increase in the B&O tax rate from 1.5 percent to 2.5 percent for all business reporting in the services categoryThis would affect services such as medical, architectural, legal and janitorial, as well as activities that don’t fit under other B&O classifications, such a broker or agent commission income, solid waste collections charges and movie admission charges.

We have extraordinary surplus revenue this biennium thanks to a great economy. We do not need to raise taxes this year. If anything, we should be looking at ways to cut taxes to stimulate the economy further and give back to you, the taxpayers.

 

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