House passes $236 million Supplemental Operating Budget. Tax increases to fund it passed out of committee.

March 6, 2014

The state House of Representatives on Tuesday passed its version of the 2014 supplemental operating budget, seeking to spend an additional $236 million over the $33.6 billion 2013-15 budget approved last year. The vote was 53-44, along party lines, with one Democrat and all Republicans voting against the bill.

House lawmakers amended Senate Bill 6002, the much smaller $96 million bi-partisan package passed by the Senate last week, to include $60 million for education improvements and $55 million for school employee cost-of-living increases. 

Seeking to pay for these spending increases, the House may pass HB 2796 to impose a range of tax increases, including imposing a sales tax on bottled water. HB 2796 was voted out of the House Finance Committee on Tuesday, with an eight-to-five party line vote. 

The House Finance Committee also voted out HB 2795 to impose a new 75% tax on E-Cigarettes—devices that heat nicotine-laced flavored liquids to allow users to inhale the vapors. Opponents of the bill pointed out in testimony that the devices are smoking cessation aids, not substitute tobacco products, and taxing them at such a high rate would drive users to smoking cigarettes. In the seven-to-six vote to pass the bill out of committee, one Democrat committee member joined the five Republicans in voting “no.” 

House passage of the amended Senate budget bill now sets the stage for negotiations between the House and Senate to iron out the differences in the closing days of the session, which is scheduled to end next Thursday, March 13th.

The House also passed its version of the 2014 supplemental capital budget (SB 6020) on Tuesday, which adds $166.5 million for construction projects to the 2013-15 capital budget. The vote was 92 to four. In a separate bill, HB 2797, House lawmakers approved a proposal to issue $707 million in bonds for new classroom construction, to be paid for with future state lottery profits. The bill had bi-partisan support and passed 90 to seven. State Treasurer Jim McIntyre has warned this proposal could risk the state’s bond rating and drive up borrowing costs.

Also on Tuesday, the House passed a 2014 supplemental transportation budget  (HB 2762), adding $339 million to the existing $8.7 billion budget. The governor had asked for an additional  $402 million in his supplemental budget request. The bill passed 73 to 24.The Senate also passed its version of the supplemental transportation budget (SB 6001), adding $379.5 million, by a vote of 44 to five.

A full transportation package for 2013-15 has yet to be enacted and has been the subject of negotiations between House and Senate leaders during this session. The Senate Majority Coalition released its proposal in a package of bills introduced on Monday. The core of the proposal is SB 6577, to increase the gas tax by 11.5 cents per gallon, increase driver-related fees, and allow King County officials to impose a Motor Vehicle Excise Tax (MVET). Sixty percent of the MVET revenue would go to roads, 40% to transit.

Student test scores used in teacher evaluations is another issue that could be resolved before the legislature adjourns. A bill that would meet federal requirements and keep some $40 million in federal funds for the state’s schools failed in the Senate earlier this session, but a new House bill (HB 2800) was introduced on Monday, and the Senate passed a similar bill (SB 5880) out of the Ways and Means Committee on the same day. 

It looks like an interesting race to the finish line of this session. Look to www.washingtonVotes.org and WashingtonVotes.org News for the latest updates.