Final Votes on the State Budget

By FRANZ GREGORY  | 
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Jul 18, 2017

Lawmakers remained in their home districts for most of the Second and Third Special Sessions of the Washington State Legislature, while leaders from both chambers met to resolve key issues like a basic education funding plan, a two-year state operating budget, and tax measures to help  pay for them. 

Legislative leaders and the Governor finally reached agreements on these key issues during the week before the July 4th holiday, and passed the necessary bills in a late night session on June 30th, narrowly avoiding a government shut-down.  The Third Special Session is currently in its 27th day, and a number of issues, including a Capital Construction Budget and water rights related to what is known as the “Hirst” decision by the state Supreme Court, still remain to be resolved.

HB 2242: Fully funding state basic education by providing equitable education opportunities through reform of state and local education contributions. Passed the House on June 30, 2017 by a vote of 67-26 (Five members excused). See Who Voted "Yes" and Who Voted "No".

This bill seeks to meet the final piece of the state Supreme Court’s 2012 “McCleary” mandate. Lawmakers had already provided more than $2 billion in additional school funding in previous sessions, but the largest problem remaining centered on state funding for teacher salaries. School districts currently pay for a large part of those salaries with local property tax levies.

A key element of the bill, as passed, is to raise the statewide property tax from $1.89 to $2.70 per $1,000 of assessed value, starting next year, with the increase going to education funding. The plan then caps local property tax levies, at a lower level beginning in 2019 and limits what the money can be spent on. The school district levy lid is capped at the lesser of $2,500 per student or $1.50 per $1,000 of assessed property value, effective calendar year 2019 and limits use of school district levies and local effort assistance to enrichment as defined. Local effort assistance is provided in proportion to a school district's actual levy compared to the maximum levy, up to a combined total of $1,500 per student, effective calendar year 2019.

Overall, the bill adds some $7.3 billion in state funding for basic education over the next four years.

HB 2242: Fully funding state basic education by providing equitable education opportunities through reform of state and local education contributions. Passed the Senate on June 30, 2017 by a vote of 32-17. See Who Voted "Yes" and Who Voted "No".

Partially veto on July 6, 2017. Governor Inslee vetoed sections of the bill that limited school districts’ use of late start and early release days to seven occurrences each school year; required the Caseload Forecast Council to convene a technical working group to determine the feasibility of developing a model to aid in school district four-year budget plans; and repealed statutes that govern approved training and continuing education clock hours for  credit on the salary schedule, effective for the 2017-18 school year.

SB 5883: Making operating appropriations for the 2015-2017 (Supplemental) and 2017-2019 fiscal biennia. Passed the Senate on June 30, 2017 by a vote of 39-10. See Who Voted "Yes" and Who Voted "No".

This bill is a $43.7 billion two-year spending plan for the various agencies and programs of the state for 2017-19, including appropriations for general government agencies, human services programs, natural resources agencies, and education institutions. In addition, it makes supplemental operating appropriations for 2015-2017 fiscal biennium.

Budget summary materials are available online at www.fiscal.wa.gov under the Budget Bills & Documents header (Operating Budget).

SB 5883: Making operating appropriations for the 2015-2017 (Supplemental) and 2017-2019 fiscal biennia. Passed the House on June 30, 2017 by a vote of 70-23 (Five members excused). See Who Voted "Yes" and Who Voted "No".

Partial veto on June 30, 2017. Governor Inslee vetoed thirteen sections or subsections of the bill— dealing with studies on market rate and subsidized housing; occupational disease; burrowing shrimp control; local government legal obligations and revenue capacity; contract for Sound Transit sales tax collection; Washington Business One-Stop Portal; Legislative-Executive WorkFirst Poverty Reduction Oversight Task Force; prescription drug benefit administration; sub-minimum wage rulemaking; Center for Workers-King County; management reductions at transportation agencies; Law Enforcement Officers' and Fire Fighters' retirement system; and appropriations for the Health Care Authority.

HB 2163: Relating to Revenue. Passed the House on June 30, 2017 by a vote of 53-40 (Five members excused). See Who Voted "Yes" and Who Voted "No".

This bill imposes several new taxes by repealing current tax exemptions, including the retail sales tax on bottled water, and the tax on self-produced fuels. It also imposes new taxes on internet sales, requiring marketplace facilitators, referrers, and their sellers to collect and remit sales or use tax, or comply with notice and reporting requirements.

It also extends B&O tax liability to businesses engaged in retail sales so long as they have more than $267,000 in receipts from Washington or at least 25 percent of total property, payroll or total receipts are in this state during the calendar year.

HB 2163: Relating to Revenue. Passed the Senate with amendments on June 30, 2017 by a vote of 33-16. See Who Voted "Yes" and Who Voted "No".

The Senate amendment implements the public utility tax on fuel extracted, manufactured, and consumed in petroleum production over four years beginning on January 1, 2018 and changes the distribution of public utility privilege tax revenues to the state and local government from June to the first business day of July.

HB 2163: Relating to Revenue. House agreed to Senate amendments on June 30, 2017 by a vote of 51-42 (Five members excused). See Who Voted "Yes" and Who Voted "No".

Signed by the Governor on July 7, 2017.

SB 5977: Relating to Revenue. Passed the Senate on June 30, 2017 by a vote of 33-16.  See Who Voted "Yes" and Who Voted "No".

This bill, as passed, reduces the general manufacturing business and occupation tax rate and the processing for hire rate from 0.484 percent to 0.2904  percent over four years beginning in 2019.

The bill also creates a business and occupation tax exemptions for agricultural fertilizer and seed;

extends preferential business and occupation tax rates for manufacturers and wholesalers of specific solar energy material and parts and for manufacturers and processors for hire of semiconductor materials; provides sales and use tax exemptions to encourage coal-fired electric generation plants to convert to natural gas-fired plants or biomass energy facilities; extends the sales tax deferral on construction and expenditure costs of up to two new manufacturing facilities per calendar year; increases the business and occupation tax credit for qualifying activities to attract additional motion picture and film projects; and provides a leasehold excise tax credit to the University of Washington, Washington State University and community or technical colleges.

SB 5977: Relating to Revenue. Passed the House on June 30, 2017 by a vote of 83-10 (Five members excused).  See Who Voted "Yes" and Who Voted "No".

Partial veto on July 7, 2017. Governor Inslee vetoed the reduction in the general business and manufacturing tax rate as well as the tax exemption for coal-fired plants that convert to natural gas or biomass.

SB 5975: Relating to paid family and medical leave. Passed the Senate on June 30, 2017 by a vote of 37-12.  See Who Voted "Yes" and Who Voted "No".

With passage of this bill, Washington joins four other states in providing for paid family medical leave, including childbirth, but Washington’s will be among the most generous, covering at least three months of leave, and providing at least 90 percent of low-wage workers’ weekly income. It is the only state plan that is not totally paid for by employee contributions. 

The bill provides for paid family leave, beginning January 1, 2020, of up to 12 weeks after the birth or placement of a child, to care for a family member with a serious health condition, or because of a military exigency. It also provides for  paid medical leave, beginning January 1, 2020, of up to 12 weeks for an employee's serious health condition.

It establishes a total premium of 0.40 percent of wages beginning on January 1, 2019, with employees paying 100 percent of the premium portion that is for family leave and 45 percent of the premium portion that is for medical leave. Employers are allowed to pay the employee's share of the premium.

SB 5975: Relating to paid family and medical leave. Passed the House on June 30, 2017 by a vote of 65-29 (Four members excused).  See Who Voted "Yes" and Who Voted "No".

Signed by the Governor on July 6, 2017.