Legislative session ends in late-night votes as Democrats push through record-high spending bill, tax increases, and measure to use race in public hiring, education and contracting.
The final gavel came down at 11:59 p.m. Sunday, officially ending this year’s scheduled 105-day regular session of the Washington legislature. It is the first time in ten years that a budget-writing session of the legislature ended on time. By comparison, it took lawmakers 193 days of regular and special sessions in 2017 to complete their work and narrowly avoid a state government shutdown.
The adjournment capped a weekend of marathon floor sessions, as majority Democrats pushed through record-high spending levels for the next two years and more than a billion dollars in new and increased taxes.
The final 2019-21 state operating budget (HB 1109) was agreed upon behind closed doors by a conference committee of House and Senate budget-writers, then rushed through both chambers by party-line votes without allowing amendments or debate. The $52.4 billion plan is the first in the state’s history to exceed $50 billion and represents an 18 percent increase over current spending.
Top spending items include:
- $451 million for state employee salary increases and benefits that were secretly negotiated with public employee unions;
- $3.9 billion for state funding of schools, including pay increases for school employees;
- $280 million for mental health, including increased staffing at the state’s psychiatric hospitals;
The plan also provides $2 million for added security costs related to Governor Inslee’s presidential campaign.
House and Senate Democrats also passed SB 5313, a bill to allow school districts to raise local property taxes. The current limit is $1.50 per $1,000 of property value or $1,500 per student, whichever is less. The new limit is now $2.50 per $1,000 of value or $ 2,500 per student in school districts with fewer than 40,000 students. For districts with more than 40,000 students, which only applies to Seattle, the per-student limit will now be $3,000.
Notably, the bill excludes children at charter schools, which are public schools, from benefitting from funding assistance available to other schools.
In other late-night action Democrats pushed through a number of new and increased taxes, including:
- SB 5998, a new graduated real estate excise tax to replace the state’s current flat tax rate of 1.28 percent. Sellers of homes valued between $500,000 and $1.5 million will continue to pay 1.28 percent, but homes selling for between $1.5 million and $3 million will be taxed at 2.75 percent. Those over $3 million will be taxed at 3 percent. Homes selling for under 500,000 will be taxed at a lower 1.1 percent rate. The tax is estimated to raise $243.5 million over the next two years, with most of that allocated to general state spending.
- HB 2158 imposes tax hikes on Washington businesses to raise $376 million over the next two years. Service businesses, such as legal, insurance, engineering, and smaller software companies will have to pay a 20 percent surcharge on their current business taxes. Large computing companies with worldwide gross incomes of $25 billion to $100 billion will pay 33 percent on top of their current rate. Hi-tech and software companies with gross global income of over $100 billion are charged 66.7 percent above their current rate. Most of the money collected is not part of the $52.4 billion state budget, but will go to a separate account to pay for expanded higher education programs, including free tuition for families making up to $50,000 a year.
- HB 2167 was a blank, “title only” bill brought out by House Democrats on Friday. They tacked a new bill onto the document imposing a 1.2 percent additional tax on banks. The bill supposedly raises the tax only on “banks that are members of larger financial groups with more than $1 billion in annual net income.” But, smaller banks that often have banking relationships with larger organizations will also have to pay the additional tax, even though they do not nearly have that level of income. The bill nearly doubles the tax paid by most banks, making Washington’s tax among the highest in the country. The new tax is expected to raise $133.2 million for general state spending over the next two years.
Democrats also passed Initiative 1000 reversing the 20 year-old voter-approved ban on race-based policies. Republicans argued that Initiative 1000 will abolish the current standard of equality for all and replace it with rules for different people based on color. They also said that the people of Washington should be allowed to vote on Initiative 1000, because it overturns Initiative 200 which voters had approved by more than 60 percent in 1998. Had the legislature not passed Initiative 1000, it would have gone on this November’s ballot for a vote by the people.
On Monday, a group opposing racial discrimination filed a referendum petition to put Initiative 1000 on the November ballot. They must collect 130,000 valid voter signatures by July of this year to qualify for the ballot.
Check to see how your legislators voted on these and other bills passed during this session by visiting washingtonvotes.org, and follow us on Facebook and Twitter #waleg.