Tag Archives: Operating Budget

House Passes Revenue Legislation

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Late last night the House passed their proposed revenue package (SB 6143) with a vote of 52-45.

Though the House passed their proposed revenue package from committee to the floor last week  (HB 3191), it is the Senate’s proposed revenue legislation that the House voted on last night.

The House passed a striker, which removes the language from the Senate’s revenue legislation and replaces it with the House’s proposed revenue package (HB 3191). As a result the House effectively passed their proposed revenue package using SB 6143 as the vehicle.

The striking language passed by the House narrows or eliminates numerous current tax loopholes; removes sales tax exemptions for bottled water, elective cosmetic surgery, candy & gum, and custom software; and includes various other measures.

The House considered 18 amendments to the bill, of which nine were adopted.

  • Requires the applicant for the rural county sales tax exemption/deferral program to provide information on new jobs for the local work force.
  • Requires the department of revenue and the other members of the streamlined sales tax project advisory group to recommend modifications to the definition of candy under the streamlined agreement.
  • Removes provisions imposing sales tax on janitorial services.
  • Changes the effective date of the minimum nexus provisions from April 1, 2010, to July 1, 2010. Makes a technical correction.
  • Eliminates the July 1, 2020, expiration date for the livestock nutrient management sales and use tax exemption.
  • Expires, on July 1, 2011, the section that allow the DOR to disregard tax avoidance transactions.
  • Changes the effective date of the provisions modifying the 1st  mortgage deduction from April 1, 2010, to July 1, 2010.
  • Caps the aircraft tax for aircraft manufactured in 1970 and before to an amount that is twice the current aircraft tax.
  • Clarifies that the nexus and apportionment provisions only apply to state business and occupation taxes and not local taxes.

The House’s revenue legislation generates $700 million in new revenue for the 2009-11 biennium. This is approximately $190 million less than the revenue passed by the Senate over the weekend.  

SB 6143 now goes back to the Senate for concurrence. If the Senate does not agree to the changes the House made then the bill will move to conference.

Status of Moving Parts as Session Nears End

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Today is the first day of the last week of the scheduled 2010 supplemental session. Though much progress was made over the weekend several major pieces necessary to adjourn without a special session remain in motion.

Operating Budget
The 2010 supplemental operating budget (ESSB 6444) has passed both the House and Senate. The House passed a striker, which strikes the language from the Senate’s proposed 2010 operating budget and replaces it with the House’s proposed operating budget language. As a result the House effectively passed their proposed operating budget using SSB 6444 as the vehicle. The Senate did not concur with the changes made by the House.  As a result, ESSB 6444 is now in conference.

Capital Budget
The House proposed 2010 supplemental capital budget (HB 2836) is on the House floor waiting for further consideration. The Senate proposed 2010 supplemental capital budget (SB 6364) passed out of committee today and now goes to the Senate floor for further consideration.

Revenue Legislation
Though several revenue-related bills have been heard recently in various committees two revenue-related bills have made it into the end-game. Senate Bill 6143- sales tax and closes loopholes –  and Senate Bill 6874 – increases tobacco product tax.  Senate Bill 6143 is on the House floor awaiting further consideration. It is expected that the House will strike the language in SB 6143 and replace it with language that reflects the House’s proposed revenue package. Senate Bill 6874 is also on the House floor awaiting further consideration.

Senate Ways and Means Takes Action on Revenue Bills

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Yesterday, the Senate Ways & Means Committee held a long executive session to take action on  two revenue bills – Senate Bills 6874 and 6143. Both bills reflect the intent of the Senate’s revenue package released in February.

Substitute Senate Bill 6874, passed on a voice vote, would significantly increase the cost of tobacco products in Washington.  If enacted, the bill would increase the tax on cigarettes by $1, to a total of $3.025 per pack of 20 cigarettes. In addition, an added tax of  $1.825 per pack is included on promotions such “as buy one pack get one free” and “two packs for the price of one”.  Finally, cigarettes that are manufactured by nonparticipating members in the master settlement agreement are subject to an additional tax of 42 cents per pack.

The bill also creates the basic health plan stabilization account in which the tax revenue generated will go to  support enrollment in the basic health plan.

The revenue generated for FY11 is expected to be $85.698 million and is estimated to fund approximately 36,600 enrollments in the basic health plan.

Substitute Senate Bill 6874 nows goes to the Senate Floor for further consideration.

Substitute Senate Bill 6143 passed with a vote of 12-10. SSB 6143 includes a proposed temporary three-tenths of 1 percent sales tax increase and the implementation of the Working Families Tax Credit.  

The sales tax increase would be for three years and would include funding for the Working Families Tax Credit to dramatically reduce the impact on low income families. The Washington Department of Revenue has estimated the tax increase would cost the typical household $29.33 a year. The tax credit, provided to those eligible for the federal Earned Income Tax Credit, would provide a minimum rebate of $25.

In addition, the bill closes more than a dozen tax loopholes ( No longer among them is a sales tax exemption for used car trade-ins). Finally, the bill includes the implementation of a sales tax on bottled water (expires June 1, 2015) and the implementation of a three-year business and occupation tax surcharge on services of one-quarter of 1 percent. The latter would be teamed with an increase in the small business tax credit from $35 per month to $70 per month.

The two-bill revenue package would generate $890 million. SSB 6143 now goes to the Senate floor for further consideration.

House Passes 2010 Supplemental Operating Budget

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Late last night the House passed their proposed 2010 supplemental operating budget  (SB 6444) with a vote of 55-43.

Though the House passed their proposed 2010 supplemental operating budget from committee to the floor two weeks ago (HB 2824), it is the Senate’s proposed budget that the House voted on.

The House passed a striker, which strikes the language from the Senate’s proposed 2010 operating budget and replaces it wit the House’s proposed operating budget language (HB 2824). As a result the House effectively passed their proposed operating budget using SB 6444 as the vehicle.

The striking language passed by the House reduces state funding to Evergreen by 3%, of which $415,000 must be used to reduce compensation.  In addition, the Labor Center is transferred to South Seattle Community College (reduces state funding by $150,000) and$5.839 million is transferred from the Evergreen Capital Projects Account to the general fund. Finally, $155,000 is appropriated to the Washington State Institute for Public Policy to conduct various studies.

On the floor the House considered 61 amendments to Senate Bill 6444. Of the 61 amendments, twenty-one passed. Of these the following amendments impact Evergreen.

  • Establishes a legislative task force on four-year higher education institution affordability and access. The group will consist of one member from each caucus of both the House and Senate and will be staffed by legislative staff. The group will recommend a 10-year strategy that aligns state support, financial aid, tuition, and cost management and includes an analysis of higher education business operations and job placement and retention of graduates. The report is due to the Legislature by December 1, 2010.
  • Increases the monthly employer funding rate charged to participating employers for the Public Employees’ Benefits Board (PEBB) health and insurance benefits for fiscal year 2011 from $768 to $863 per eligible employee, and requires the PEBB not to adopt a plan for expenditures on benefits and administration that would project a total reserve level for the end of fiscal year 2011 of less than $90,000,000. The intent of the Legislature is that the Governor immediately request to commence bargaining a corresponding increase in the employee share of health premiums with the coalition of all the exclusive bargaining representatives with which health care benefit funding is bargained. Transfers $30 million from the Data Processing Revolving Fund and $13 million from the Public Works Assistance Account to the Salary/Insurance Increase Revolving Account. This amount is appropriated for agency charges due to the increased monthly employer funding rate in lieu of an appropriation from the state general fund.
  • Reduces the general fund–state appropriation at TheEvergreen State College by $14,000 and appropriates those amounts to the State Board for Community and Technical Colleges for the Labor Education and Research Center.
  • Requires that at The Evergreen State College, $119,207 of the general fund–state appropriation for FY 2011 must be spent on the Longhouse Center and $103,146 of the general fund—state appropriation for FY 2011 must be spent on the Northwest Indian Applied Research Institute.
  • Deletes the section reducing appropriations related to SSB 6503 (temporary layoffs), and directs the Office of Financial Management to develop a schedule of reduced compensation expenditures of state agencies by $48,648,000 million General Fund-State and $51,975,000 from all other funds. The reductions are to be distributed to each agency and institution of higher education proportionately based on each state agency and institution’s share of the total compensation of all state employees.

So what happens next in the legislative process.  Senate Bill 6444 now goes to the Senate for concurrence. Since the Senate’s proposed operating budget and the House’s proposed operating budget differed greatly, it is likely that the Senate will not concur with the changes made in the House. If the Senate does not concur, the bill will go to conference where a final 2010 supplemental operating budget will be developed.

Legislature Week 9: What is Happening

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The ninth week of the 2010 supplemental session- the last week of the legislation session – will be focused on closing differences between the Senate and House with regards to the operating and capital budgets as well as revenue.

As of today the proposed 2010 operating and capital budgets as well as revenue packages from the House and Senate have been released.

The floors of both chambers will be the center of legislative action from today through March 11.

Senate Ways and Means Hears Income Tax Legislation

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The Senate Ways & Means Committee held a public hearing late this afternoon on income tax legislation.

The proposed Substitute Senate Bill 6250 refers a new income tax to voters at the next general election. The income tax would be imposed on:

  • An individual’s income that is over $200,000.
  • For a head of a household, income over $300,000 is taxed.
  • For a married couple, the tax applies to income over $400,000.
  • If approved a tax on income is imposed on January 1, 2011, andthe state sales tax would be reduced to 5.5 percent on July 1, 2012.

The plan,presented by some Senate Democrats, would go something like this. The Legislature would pass a temporary sales tax increase, which would go into effect immediately to help alleviate our state’s looming cash-flow problem. In addition, the Legislature would also pass a referendum to the people, giving them the opportunity in November to repeal not just that three-tenths-of-a-cent increase, but an additional half-cent off the state sales tax – taking the state rate down to 6 cents, a level not seen in thirty years. Finally, in its place would go a high earners’ income tax of 4.5 percent on all income over $200,000 for individuals, $300,000 for heads of households, and $400,000 for married couples.

As with any other public hearing on a bill, committee staff provided by an overview of the bill. What was different during this hearing was the normal procedural overview of the bill was intermixed with parliamentary procedures rarely heard. An exciting moment for any political wonk.

After clarification and at the Chair’s discretion, the public hearing moved forward. Testimony opened with an eloquent and strong statement by the sponsor of the legislation, Sen. Rosa Franklin.

Testimony was presented that both favored and challenged the proposed subsitute bill heard before the Committee. Some of those that testified in favor of the bill included students from The Evergreen State College.

The Committee did not take any action on the bill.

House Looks to Move Operating and Capital Budgets; Revenue Passes House Committee

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Overnight the focus of the Washington Legislature has moved from committees to the floor.

The House is expected to take up the operating budget and the capital budget today.

Though the House passed their proposed 2010 supplemental operating budget from committee to the floor late last week (HB 2824), it is the Senate’s proposed budget that will likely be the version voted on in the House.

The House has prepared a bill to strike the language from the Senate’s proposed 2010 operating budget (SB 6444) and include the House’s proposed operating budget language. As a result the House will effectively pass their proposed operating budget using SB 6444 as the vehicle.

This will force the bill to go to conference between the Senate and the House because it is unlikely that the Senate will agree to the changes the House will make on the floor when it votes on SB 6444.

The House will vote on its proposed 2010 supplemental capital budget as soon as today (HB 2836) . The Senate has yet to release a proposed 2010 supplemental capital budget.

Finally, the House Finance Committee held a public hearing and moved the House’s revenue package (HB 3191) out of committee and to the House floor.

House Releases Revenue Package

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This afternoon the House released their proposed 2010 supplemental revenue package.

The House’s revenue package generates $758 million in new revenue for the remainder of the 2009-11 biennium and anticipates another $100 million to be generated from anticipated budget actions this session.

The House’s package resembles both the Governor and Senate’s proposed package. All three include closing tax loophooles and increases in sin taxes and both the House and Senate include savings from legislation to be enacted this session.

The largest difference among the revenue packages proposed is either the presence or absence of a sales tax. The Senate revenue package is the only one that includes a temporary increase in the sales tax.

Highlights of the House’s revenue package are below.

Highlights of Revenue Package

  • Narrows or eliminates numerous current tax preferences or “tax loopholes” ($385.31 million).
  • Removes sales tax exemptions for bottled water, elective cosmetic surgery, candy & gum, custom software, and janitorial services ($163.2million).
  • The cigarette tax is increased by $1 per package and taxes on other tobacco products are equalized ($111.6 million)
  • Increases taxes by 0.5% on lawyers, accountants, agends, marketing and management consultants ($21.7 million).
  • Repeals exemptions on investment earlings for nonfinancial firms ($58 million).
  • Implements savings from the Convention Center Tax Recovery (HB 3027) ($10.1 million)
  • Limits exemption to the wind M&E ($7.8 million)
  • Restores the PUD privilege tax to original legislative intent ($1.2 million).
  • Implements SB 6409 ($30 million)
  • Transfers funds from the captal budget ($70 million).

Details on the House’s proposed revenue package can be found on the House Democratic Caucus website.  

A public hearing on the revenue package (HB 3191) is scheduled for tomorrow, March 2, at 9:00 a.m. before the House Finance Committee.

Senate Passes 2010 Proposed Supplemental Operating Budget

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Saturday the Senate passed their proposed 2010 supplemental operating budget (Substitute Senate Bill 6444). The budget passed with a vote of 25.19.

Four amendments were proposed to the 2010 supplemental operating budget.  Only one of the proposed amendments passed and was amended to the bill.

Amendment 036, proposed by Sen. Murray, deletes language creating a global health program and makes funding provided solely to implement the provisions of SSB 6675 (global health program). The amendment also states that if the bill is not enacted by June 30, 2010, the $1 million provided in the subsection will lapse.

The amendment adopted does not impact higher education nor did any of the amendments that were not adopted by the Senate.

The Senate’s proposed 2010 supplemental budget now moves to the House for further consideration.

Senate Moves Proposed 2010 Supplemental Budget

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The Senate Ways & Mean Committee took action on the Senate’s proposed 2010 supplemental operating budget late last night.

The Committee passed a subsitute bill last night that modified language in the original budget bill. An initial examination of Substitute Senate Bill 6444 showed no difference between the original bill and the substitute bill for Evergreen.

The Senate is expected to take action on the bill on the Senate Floor this afternoon, Saturday, February 27.