March 29, 2019: Week Eleven
Budgets were the primary focus of week eleven here in Olympia. Following a noon press conference at the Capitol, House Democrats released the first Operating, Capital, and Transportation budget proposals for fiscal years 2019-21. The Operating budget proposal estimates appropriations of $52.8 billion which is a net increase of $2.3 billion in spending over the 2017-19 budget. The largest 4-year outlook expenditures include behavioral health ($579 million); K-12 schools including special education, school employee benefits, and levy equalization ($1.6 billion); college and workforce ($1.5 billion); early childhood education and child care ($164 million); and housing and homelessness ($76 million).
As noted in our most recent report, the revenue forecast released last week indicated $50.56. To fill a portion of the $2.24 billion hole between the Democrats’ proposed budget and expected revenue, they have proposed additional revenues in the form of an “extraordinary profits” (i.e. capital gains) tax and progressive real estate excise tax (HB 2156); the elimination of preferential B&O tax rates for tour operators and alteration of the out-of-state sales tax exemption (HB 2157); and a B&O tax surcharge on a slew of degree-requiring business service categories to fund higher education (HB 2158).
The Senate Democrats then followed suit later in the week with the release of their Transportation, Capital, and Operating budgets proposals. While the spending categories were largely similar, the Senate’s appropriations were generally lower across the board. The budgets were also alike in the inclusion of a graduated REET (SB 5991) and elimination of certain preferential B&O tax rates (SB 5997). The Senate budget, however, does not include a Capital Gains tax or B&O surcharge as revenue sources, and instead proposes a reduction of the preferential B&O tax rate for prescription drug warehousing (SB 5988), an insurance premium surtax for wildfire prevention (SB 5996), and a revenue-generating restructuring of the Model Toxics Control Account (MTCA) as part of the their Capital budget proposal (SB 5993). They also have proposed several Capital Gains tax proposals separate from the budget to provide tax breaks for families, seniors and small businesses and property tax relief. Analysis of these numerous budget proposals is currently underway and we will have more detailed information early next week.
Public hearings were held this week on all budgets (except the Senate Operating, which will be heard on Monday of next week), at which the majority of testimony involved requests for additional funding. The expansive B&O surcharge (HB 2158) and MTCA (SB 5993) revenue bills were also heard amongst a series of industry opposition testimonies and a few surprising proponents—notably Microsoft for HB 2158. The other revenue bill will be heard next week. Both chambers are working hard to push the budgets and tax bills through quickly; already passing the House Operating and Transportation budgets off the floor by the end of the week.
Overall, the Senate Capital budget includes $42M for the Clean Energy Fund while the House has proposed funding of $25M. This included notable reductions in the categories of grid modernization, R&D, and non-profit lenders, as well as elimination of funding for Grays Harbor and the Northwest Seaport Alliance.
No action was taken this week on the 100% Clean legislation, SB 5116. It is scheduled for a vote in the House Finance committee next week and will then move to the House Appropriations committee. All indications are still that this will be signed into law by the end of session.
Upcoming Hearings
Environment & Energy (House) – HHR B, JLOB – 4/1 @ 1:30pm
- SB 5811 – Exec Session – Reducing emissions by making changes to the clean car standards and clean car program.
Ways & Means (Senate) – SHR 4, JACB – 4/1 @ 3:30pm
- SB 5153 – Public Hearing – Making 2019-2021 biennium operating appropriations. (Hearing is on the Proposed Substitute.)
- SB 5134 – Exec Session – Concerning the capital budget.
Finance (House) – HHR A, JLOB – 4/2 @ 8:00am
- E2SSB 5116 – Exec Session – Supporting Washington’s clean energy economy and transitioning to a clean, affordable, and reliable energy future.
Environment & Energy (House) – HHR B, JLOB – 4/2 @ 3:30pm
- SB 5811 – Exec Session – Reducing emissions by making changes to the clean car standards and clean car program.
Ways & Means (Senate) – SHR 4, JACB – 4/2 @ 3:30pm
- SB 5153 – Exec Session – Making 2019-2021 biennium operating appropriations.
Finance (House) – HHR A, JLOB – 4/4 @ 8:00am
- HB 2156 – Public Hearing – Investing in quality prekindergarten, K-12, and postsecondary opportunities throughout Washington with excise taxes on sales and extraordinary profits of high valued assets.
- HB 2157 – Public Hearing – Updating the Washington tax structure to address the needs of Washingtonians.
- E2SSB 5116 – Exec Session – Supporting Washington’s clean energy economy and transitioning to a clean, affordable, and reliable energy future.
Transportation (Senate) – SHR 1, JACB – 4/4 @ 1:30pm
- E2SHB 1110 – Public Hearing – Reducing the greenhouse gas emissions associated with transportation fuels.
Finance (House) – HHR A, JLOB – 4/5 @ 8:00am
- HB 2156 – Exec Session – Investing in quality prekindergarten, K-12, and postsecondary opportunities throughout Washington with excise taxes on sales and extraordinary profits of high valued assets.
- HB 2157 – Exec Session – Updating the Washington tax structure to address the needs of Washingtonians.
Bill Status
High Priority Bills
No bills.
Medium Priority Bills
No bills.
Low Priority Bills
No bills.
Monitoring Bills
| Bill # | Title | Status | Sponsor | Position |
| SHB 1226 | Encouraging investment in and reducing the costs of transitioning to the clean energy future. | H Finance | DeBolt |
Other Bills
| Bill # | Title | Status | Sponsor | Position |
| SHB 1102 (SB 5134) |
Concerning the capital budget. | Tharinger | ||
| ESHB 1109 (SB 5153) |
Making 2019-2021 biennium operating appropriations and 2017-2019 biennium second supplemental operating appropriations. | H Passed 3rd | Ormsby | |
| E2SHB 1110 (SB 5412) |
Reducing the greenhouse gas emissions associated with transportation fuels. | S Transportation | Fitzgibbon | |
| SHB 1113 | Amending state greenhouse gas emission limits for consistency with the most recent assessment of climate change science and with the United States’ commitment under the 2015 Paris climate agreement. | H Approps | Slatter | |
| EHB 1126 | Enabling electric utilities to prepare for the distributed energy future. | S Rules 2 | Morris | |
| 2SHB 1211 (E2SSB 5116) |
Supporting Washington’s clean energy economy and transitioning to a clean, affordable, and reliable energy future. | H Approps | Tarleton | |
| E3SHB 1257 (2SSB 5293) |
Concerning energy efficiency. | H Passed 3rd | Doglio | |
| HB 1397 | Encouraging the use of electric or hybrid-electric aircraft for regional air travel. | S Rules 2 | Slatter | |
| SHB 1832 | Concerning the electrification of the Washington public vehicle fleet. | H Trans | Macri | |
| SHB 2042 | Advancing green transportation adoption. | H Finance | Fey | |
| HB 2156 | Investing in quality prekindergarten, K-12, and postsecondary opportunities throughout Washington with excise taxes on sales and extraordinary profits of high valued assets. | H Finance | Jinkins | |
| HB 2157 | Updating the Washington tax structure to address the needs of Washingtonians. | H Finance | Tarleton | |
| SB 5108 (HB 1070) |
Concerning the tax treatment of renewable natural gas. | S Environment, E | King | |
| 2SSB 5115 (2SHB 1444) |
Concerning appliance efficiency standards. | S Rules X | Carlyle | |
| E2SSB 5116 (2SHB 1211) |
Supporting Washington’s clean energy economy and transitioning to a clean, affordable, and reliable energy future. | H Finance | Carlyle | |
| SB 5134 (SHB 1102) |
Concerning the capital budget. | S Ways & Means | Frockt | |
| SB 5153 (ESHB 1109) |
Making 2019-2021 biennium operating appropriations. | S Ways & Means | Rolfes | |
| E2SSB 5223 (HB 1862) |
Concerning net metering. | H ENVIDPA | Palumbo | |
| 2SSB 5293 (E3SHB 1257) |
Concerning energy efficiency. | S Rules X | Carlyle | |
| 2SSB 5336 (HB 1664) |
Advancing electric transportation. | S Ways & Means | Palumbo | |
| SSB 5588 | Authorizing the production, distribution, and sale of renewable hydrogen. | H 2nd Reading | Hawkins | |
| SB 5811 (HB 1999) |
Reducing emissions by making changes to the clean car standards and clean car program. | H Env & Energy | Nguyen | |
| SSB 5936 (HB 2079) |
Concerning use of industrial waste through industrial symbioses. | H ENVIDPA | Brown | |
| SB 5980 | Relating to greenhouse gas emissions. | S Environment, E | Honeyford | |
| SB 5981 | Implementing a greenhouse gas emissions cap and trade program. | S Environment, E | Carlyle |
Dead Bills
| Bill # | Title | Status | Sponsor | Position |
| HB 1127 | Concerning the electrification of transportation. | H Env & Energy | Morris | |
| HB 1128 | Authorizing an alternative form of regulation of electrical and natural gas companies. | H Env & Energy | Morris | |
| HB 1129 | Concerning customer-sited electricity generation. | H Env & Energy | Morris | |
| SHB 1642 | Allowing the energy savings associated with on-bill repayment programs to count toward a qualifying utility’s energy conservation targets under the energy independence act. | H Rules C | Doglio | |
| HB 1664 (2SSB 5336) |
Advancing electric transportation. | H Env & Energy | Slatter | |
| SHB 1796 (SB 5730) |
Concerning commercial property assessed clean energy and resilience. | H Rules C | Doglio | |
| HB 1862 (E2SSB 5223) |
Concerning net metering. | H Env & Energy | Mead | |
| HB 1984 | Ensuring that attempts to limit greenhouse gas emissions in Washington state do not make Washington’s agricultural products and food processing businesses economically uncompetitive, thereby shifting emissions to jurisdictions without similar greenhouse gas policies. | H Env & Energy | Maycumber | |
| HB 2079 (SSB 5936) |
Concerning use of industrial waste through industrial symbioses. | H Env & Energy | Doglio | |
| SB 5118 | Concerning the right to consume self-generated electricity. | S Rules X | Palumbo | |
| SB 5412 (E2SHB 1110) |
Reducing the greenhouse gas emissions associated with transportation fuels. | S Environment, E | Salda?a | |
| SB 5629 | Promoting small modular reactors in Washington. | S Environment, E | Brown | |
| SB 5730 (SHB 1796) |
Concerning commercial property assessed clean energy and resilience. | S Environment, E | Palumbo |