With less than a month remaining in this 105-day legislative session, House Democrats announced their 2017-19 state budget proposal on Monday. The plan calls for some $44.7 billion in spending, paid for, in part, by $3 billion in additional taxes that include a new 7 percent tax on capital gains income, an increase in the state business and occupation tax for higher grossing businesses, and a raise in the real estate excise tax on the sale of homes over $1 million.

Overall, the Democrats’ plan would spend about $1.6 billion more than the $43.1 billion proposed in the budget passed by the Republican-led Senate last week. Both plans would put about the same amount of new money, $1.8 billion, into education funding, but the plans differ significantly in other spending areas.

The House budget includes $682 million in pay raises for state workers negotiated between Governor Inslee and state employee unions last summer, which were mostly rejected in the Senate version. The House version would also freeze tuition at the state’s four year colleges and add $153 million to mental health funding.  The Senate plan would tie tuition rates to increases in state average wages, and add about $95 million to mental health.

The budget package released Monday morning includes:

•    HB 1067 - Making 2017-19 biennial appropriations. The bill, introduced early in the session  as the Governor’s $46.7 billion budget request, would essentially be stripped and replaced with the House Democratic spending plan.

•    HB 2186 - Eliminating tax preferences, imposing a business and occupation tax surcharge, enacting an excise tax on capital gains, and modifying the real estate excise tax. This bill incorporates the tax increases and changes proposed by House Democrats.

•    HB 2185 - Making the changes necessary to implement the basic education program proposed by House Democrats with regard to school employee salary allocations; local maintenance and operation levies--local effort assistance; and reporting, accounting, and transparency provisions.

The House Appropriations Committee held a hearing on HB 1067 Monday afternoon and passed the bill out of committee late Tuesday evening, after a lengthy executive session in which dozens of amendments were proposed.  Debate by the full House and a floor vote is scheduled for Friday morning.

The tax measure, HB 2186, is scheduled for a public hearing on Monday in Olympia. House Democratic leaders said they don’t have immediate plans for a floor vote on the tax bill, expecting to negotiate the details behind the scenes instead of sending a tax bill to the Senate, where it would likely die. Senate Republican leaders, during their press conference responding to the House proposals, questioned whether House Democrats actually would have the votes to pass the proposed tax package. Chief Senate budget writer John Braun (R-Centralia) said: “We’re willing to work with them, but they’ve got to show that what they have in mind is politically possible. To do anything else just says that they aren’t serious about solving the McCleary problem.”

Today marks another key cutoff deadline for this year’s regular session, the last day that committees can approve policy bills before them from the opposite chamber. The session is scheduled to adjourn on April 23rd.

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