As Washington state faces a looming $16 billion budget shortfall, legislators in Olympia are feverishly seeking solutions with the session drawing to a close in less than two weeks.
In a recent interview with KUOW’s Kim Malcolm, Jerry Cornfield of The Washington State Standard described the array of tax hike proposals being discussed by Democrats as a “buffet.”
“Oh, lots of choices,” Cornfield stated, referring to the variety of options on the table.
Among the smaller offerings are proposals to tax ZYN and expand taxes on nicotine products.
For the more substantial measures, Democrats are considering an increase in taxes for all businesses subject to the Business and Occupation (B&O) tax, with an additional focus on imposing new and higher taxes on capital gains for larger corporations and wealthy individuals.
This extensive menu, according to Cornfield, may lead to certain proposals being left behind as legislators assess which options could be more palatable to their constituents.
Interestingly, there has been little discussion around implementing a statewide payroll tax or a wealth tax in this budgetary climate.
Cornfield highlighted that Governor Ferguson has effectively sidelined the wealth tax, although it remains a possibility if legislators want to pursue it as legislation, despite uncertainties regarding its future legality.
As for the payroll tax, fears stemming from recent developments in Seattle may have dissuaded lawmakers from advancing the proposal.
The overarching aim of the Democratic Party is to raise several billion dollars to chip away at the projected shortfall.
Their current plan has the potential to generate around $5 billion in the next two years, followed by an additional $6 to $7 billion in the subsequent budget cycle.
Moreover, they hope to implement spending reductions over the next four years, resulting in a balanced budget.
Conversely, Republican lawmakers firmly oppose these tax proposals, arguing from the outset that the state does not require any new taxes.
They are expected to vote against all tax measures, and efforts may be made to persuade Governor Ferguson to either veto some proposals or negotiate with Democrats to limit the number that reach his desk.
The likelihood of such pushback remains to be seen, especially in light of Ferguson’s previous rejection of the wealth tax proposal.
Cornfield noted that while the wealth tax did not pass, any potential revenue from it would still take years to materialize, contributing to Ferguson’s cautious approach.
The pressing question now is whether the governor will endorse an across-the-board tax increase affecting around 400,000 businesses or whether he will focus on taxing major corporations, encouraging Democrats to further scale back expenditures instead.
With the legislative session scheduled to conclude on April 27, the time left for negotiation is quickly slipping away.
Despite the looming deadline, some observers believe that legislators can finalize agreements swiftly, given the multiple options for resolution.
However, the new dynamics introduced by a new governor and larger Democratic majorities may complicate the consensus-building process, as Cornfield pointed out that there has yet to be substantial communication from Ferguson regarding the latest proposals.
A meeting between the governor and Democratic leaders is set for Thursday, where a statement is expected to clarify the administration’s position on the proposed tax measures.
This forthcoming announcement may hold significant implications for how negotiations will unfold in the final days of the session.
For politicians, particularly Democrats with a majority, the urgency to finalize plans and head home could spur rapid decision-making.
However, there remains a possibility that lawmakers may face overtime if consensus is not reached swiftly, particularly given the uncertainty surrounding revenue generation and the lack of firm guidance from the governor.
Indeed, Cornfield emphasized that other tax proposals, such as an existing gas tax, have not received enough attention and have avoided scrutiny.
Ultimately, as discussions on potential taxes heat up, it appears that this legislative session will profoundly impact residents, with varied tax proposals on the table implying that, regardless of outcomes, constituents may find their financial contributions increasing in one way or another.
image source from：https://www.kuow.org/stories/wa-legislature-races-toward-deadline-to-hammer-out-a-budget
