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March 29, 2023

Dear Friends and Neighbors,

Less than a month remains of the 2023 legislative session, which is scheduled to adjourn April 23. Since my last email update two weeks ago, there have been several major developments in the Legislature regarding budgets and finance.

Major legislative budget news developments

• Revenue forecast: The Washington State Economic and Revenue Forecast Council released its quarterly revenue report and the news is mixed. For the current 2021-2023 biennium, the state is projected to have an increase in revenue of $194 million. However, the council is projecting a decrease of $483 million for 2023-2025, and another decrease of $541 million for the 2025-2027 biennium. This represents a significant slowdown in the economy compared to the November forecast. The revenue decreases in the coming two biennia are also concerning in light of the capital gains tax revenues that were already incorporated into the budget prior to the state Supreme Court's decision (See below). Persistent inflation coupled with the Federal Reserve Bank's four rate hikes in as many months, plus the added burden of the state's Climate Commitment Act (cap-and-trade) auction driving fuel prices at both the wholesale and retail levels have proven too much for an economy recovering from COVID shutdowns.

• Capital gains tax: On Friday, the Washington State Supreme Court upheld the constitutionality of the state's capital gains tax. In a 7-2 ruling, the court said the capital gains tax is constitutional, because it is an excise tax, not a property tax. In a statement issued afterward, House Republican Budget Leader Drew Stokesbary noted the ruling “provides a blueprint for future tax increases authored by clever legislators who now know they can circumvent the state's constitutional tax limits by merely labeling any new tax as an excise tax.” I share the concern that this could open the door for a state income tax down the road that could affect all Washingtonians.
  
• House Democratic operating budget: The operating budget pays for the day-to-day operations of state agencies, colleges and universities, and public schools (including federal funds and dedicated funds).This latest budget proposes to spend $70 billion over the next two years. Projected capital gains tax revenue has already been booked into the operating budget proposals. It is nearly a billion dollars higher than the Senate Democrat budget released last Thursday. The House version, which is 1,275 pages long, spends money on nearly 1,500 new or expanded programs that are in addition to other general fund ongoing programs. The operating budget also receives substantial new funding of $306 million for Climate Commitment Act (CCA) and other climate policy compliance, mostly for staffing, studies and planning, basically bigger government. Documents for the proposed House operating budget are available online here.
  
• Capital budget: The capital budget pays for acquiring and maintaining state buildings, public schools, higher education facilities, public lands, parks, and other assets. The House version released this week would appropriate and spend $8.38 billion for projects across the state. It adds another $525 million in spending to retrofit heating systems on our state university campuses and one public school for compliance with the new clean buildings law. This is just the beginning of spending required to bring our public buildings in compliance with the new climate regulations. The capital budget also includes $228 million of appropriations in the 9th District. To view those projects, go to this link, make sure the version is the “House Chair/Ranking (PSHB 1147),” choose the 9th Legislative District from the drop-down menu, and click the “View Report” button.
  
• Transportation budget: The transportation budget pays for transportation activities, such as designing and maintaining roads and public transit. The 2023-25 House proposal is $13.2 billion. It includes money for climbing lanes on SR 26 from Dusty to Colfax, and federal match money for bridges in Grant and Adams counties. As much as $723 million was appropriated from the Carbon Emissions Reduction Account (CERA). This money freed up the transportation budget to spend for extras and allowed the constitutionally-protected transportation dollars to be spread to backlogged projects in the Move Ahead Washington plan. Another $198 million from the state operating budget is used in the transportation budget largely for Puget Sound area projects.

The processes for the transportation and capital budgets have been bipartisan and collaborative. However, the laws that passed to spend dollars for energy transformation projects are required by policies that were passed along partisan lines, and were not supported by the minority party due to concerns about the impact to taxpayers and the obvious peril to the state's economy. Also, the process for the operating budget has been, and continues to be, partisan and closed. Public hearings are being held this week on each of the budgets and we expect to vote on them very soon on the House floor.

Dye bills advance in the Senate

I have two bills that have passed the House and their respective committees in the Senate. They soon could be brought to the Senate floor for a vote.

House Bill 1498 – Aviation Assurance Funding: This bill would allow local fire departments who use aviation suppression efforts on the initial attack of brush, timber and grass fires to be reimbursed by the state for those expenses. The idea is to douse a fire quickly while it is still small. In rugged areas across our district, it's not always easy getting brush trucks to the scene of a fire quickly. That's where air suppression support can make a big difference. However, our local fire departments cannot afford the expense of air suppression, even though they have used it to stop fires while they are small. This measure would allow local air support to take place quickly and provide reimbursement to those local fire suppression entities. The bill was amended before it passed the Senate Agriculture, Water, Natural Resources and Parks Committee on Monday. The amendment added an expiration date of July 1, 2027 to the bill, along with several other provisions (See the amendment here). It was referred to the Senate Ways and Means Committee for further consideration.

House Bill 1543 – Wild horse inmate training program: This bill would direct the state Department of Corrections to study and develop a plan for a wild horse training and farrier program at Coyote Ridge Corrections Center. I wrote this bill after touring the Arizona facilities in the fall of 2019 where about 30 inmates were working to train wild mustangs that had been captured from Bureau of Land Management (BLM) public rangelands in western Arizona. The program gives inmates hands-on training in the equestrian field, helps them to build self-confidence as they care for the animals, and provides the opportunity for employable skills they can use upon release, including farrier certification. The recidivism rate for those inmates who have participated in the program and served their time is low. It also helps the Bureau of Land Management manage the horse population on public lands and keeps the ranges healthy. This bill passed the Senate Human Services Committee on March 21 and now is on the Senate's second reading floor calendar awaiting a vote.

Big changes to our state's energy economy

The state's new Climate Commitment Act, also known as “cap and trade” or “cap and invest,” is already beginning to cost Washingtonians more and will affect each and every one of our lives. I recently recorded a video, a Capitol Report radio program, and wrote an article on these big energy reforms. I invite you to watch and read to learn more about how these changes will enter into your life.

• VIDEO: Rep. Mary Dye discusses concerns of big energy bills being passed by majority Democrats that could impact Washington's economy and way of life
• RADIO: Capitol Report – Two troubling bills on energy
• EDITORIAL: The new cap-and-invest law on track to make life in Washington less affordable – Rep. Mary Dye

Men, boys and guns – A disparaging bill

My office has been inundated with phone calls, emails and letters from citizens concerned about House Bill 1240 that would ban certain firearms. I spoke up on the House floor on March 8 against this bill and noted how the intent section contains “a disparaging comment that young men are inclined to become violent because they have access to these weapons.” I invite you to listen to my radio report and watch my video regarding these comments and this bill.

• RADIO: Capitol Report – Concerning so-called “assault weapons” ban
• VIDEO: Dye notes firearm bill disparages young men; says state should address boy's and men's issues instead of banning weapons

More than 1,100 on the line for our 9th District telephone town hall

I want to thank all of you who participated in our telephone town hall event with me and my seatmate, Rep. Joe Schmick, on March 13. We had more than 1,100 people on the call throughout the hour. This is a great way to connect to constituents and hear your questions, comments and concerns. We also asked three survey questions. You can read the results in Rep. Schmick's email update.

I'm here to serve you!

If you have questions, comments or suggestions about information in this email update. legislation or state government, please contact my office. I do enjoy hearing from you. My contact information is below.

Thank you for allowing me to serve and represent you!

Sincerely,

Mary Dye