Sen. Randi Becker, R-Pierce County, who serves as the Senate Republican Caucus Chair, and Senate Republican Leader Mark Schoesler offered their condolences to victims of the Amtrak train derailment.
“We are praying for the victims, families and all those involved in this tragedy,” said Becker. “I am thankful for the fast, robust response from our community’s firefighters, police and EMTs. This incident is unprecedented for our Pierce County community and I urge patience as people work to alleviate traffic, provide needed medical care and reconnect loved ones.”
“I am in conversation with the Governor’s Office and other leaders to determine how the state will respond to this emergency,” said Schoesler, R-Ritzville. “I echo Senator Becker’s sentiments. The people affected by this tragedy are in our prayers throughout Washington. We will do all we can to help citizens impacted by this disaster.”
Read more about the what the chair of the Senate’s water-related committee, Sen. Judy Warnick, R-Moses Lake, has been doing to help rural families suffering as a result of the flawed Hirst decision.
Since the regular session, Warnick who sponsored the Hirst-fix legislation, Senate Bill 5239, has been working to elevate the issue and keep rural families at the fore of discussions in Olympia.
- In late 2016, the state Supreme Court issued a ruling resulting from a challenge to rules in Whatcom County relating to the Growth Management Act.
- The ruling turned decades of water law on its head by requiring local jurisdictions, such as counties, to make legal determinations on water availability before issuing a building permit, something the state Dept. of Ecology already had done.
- Dissenters on the court noted, ““The majority’s decision hinges on an interpretation of RCW 19.27.097 that is unsupported by the plain language of the statute, precedent, or common sense.”
- Counties and cities do not have the financial resources or technical expertise to make these judgements.
- This effectively halted home building in rural parts of the state by requiring costly and duplicative studies to make legal determinations of water availability before a small, household well can be drilled.
- When the 2017 legislative session began, the impacts of the decision became apparent, as counties and cities, did not know how to handle the decision. Counties took different approaches including building permit moratoriums, creating confusion.
- The Senate Majority acted to address the problem. Sen. Judy Warnick, R-Moses Lake, introduced Senate Bill 5239, a bipartisan proposal to clarify the law and give certainty to property owners and local jurisdictions.
- During public hearings on the proposed Hirst fix legislation, property owners from around the state pled for a solution, some spending their life’s savings to build a home on a property only to be told they couldn’t and facing the possibility that the property had lost its value.
- The Senate passed E2SSB 5239 (An Act Relating to Ensuring that Water is Available to Support Development) on February 28, by a vote of 28-21. The bill was referred to the House Committee on Agriculture and Natural Resources.
- The House ANR Committee held a public hearing on the bill on March 28, one day before policy committee cutoff for bills from the opposite chamber.
- On March 29 – cutoff – the House committee failed to vote on the bill, meaning that the bill did not move out of the committee according to the required legislative timeline for policy bills.
Published opinion pieces from members of the Majority Coalition Caucus draw the connections between McCleary and the long-running effort to impose an income tax.
Senate Majority Leader Mark Schoesler, in The (Spokane) Spokesman-Review, Jan. 8, 2017: Income tax is the real issue, not schools
“This is the cleverest campaign for an income tax ever mounted in this state. Advocates for bigger government have created the illusion of a crisis in the public schools that only mountains of money can fix. Through a lawsuit they’ve gotten the state Supreme Court on their side. They would force taxes that dig deeper into everyone’s pockets, slam the brakes on economic growth, and redistribute more of the people’s hard-earned income to state agencies and powerful special-interest groups. Ultimately the goal is an income tax. Yet supporters are bending over backward to avoid using that term – and who can blame them?”
Sen. Mike Padden, R-Spokane Valley, in the Valley News Herald, Jan. 13, 2017: An out-of-bounds court casts shadow over Legislature
“Over the last 80 years this state has seen has seen considerable political agitation for an income tax. This effort comes from those with the most to gain – the unions representing state employees and teachers, social-service advocates and others. But every time an income tax has been put to the people since 1934, they have said no, in the loudest possible terms. The Supreme Court’s intrusion into the school-funding debate appears part of a well-calculated strategy to back the state into a corner and force it to adopt an income tax, whether it wants one or not.”
Sen. Tim Sheldon, D-Potlatch, in Crosscut, Jan. 20, 2017: The monster lurking behind school funding – an income tax
“Advocates of a state income tax have finally realized they will never win if they put the question to the people in an honest way. So they have set up the phoniest debate since America was forced to choose between “tastes great” and “less filling.” If you listen to the proponents, our big argument for 2017 is about levy equalization and model-school formulas — magic words that have the effect of putting an entire state to sleep. But really it is the same old argument we’ve been having in Washington more than 80 years. Our big debate isn’t about education. It’s about the income tax.”
Whether a capital gains income tax is constitutional is one issue; whether it would end with that is another. Capital gains income tax revenue is highly volatile, as are other taxes aimed at the wealthy. When the economy goes into a downturn, lawmakers will be left to scramble for new sources of money, as has been seen in other states. A broader income tax likely would not be far behind.
The experiences of California and Connecticut demonstrate the point. The severe downturn of 2008-2009 was especially difficult for California, where capital gains rates are highest in the nation and income tax brackets are skewed heavily toward the rich. Tax collections fell dramatically, and the state was forced to compensate by raising taxes on the middle class. A newly disclosed half-billion-dollar deficit in Connecticut is directly related to its capital gains income taxes — and lawmakers there already are talking about imposing higher income taxes on the general population.
At a news conference May 13, 2016, California Gov. Jerry Brown explains that reliance on unpredictable capital gains taxes has created major problems for his state.
WTNH-TV (New Haven, Conn.), April 28, 2017: Income tax revenue collapses; Malloy says taxing the rich doesn’t work
“Next year’s deficit has ballooned to $2.2 billion. It’s happening because the state of Connecticut depends too much on its wealthy residents, and wealthy residents are leaving, and the ones that are staying are making less, or are not taking their profits from the stock market until they see what happens in Washington. …It now looks like expected revenue from the final income [tax] filing will be a whopping $450 million less than expected.”
New Haven Register, May 1, 2017: Drop in income tax receipts plunge Connecticut’s budget further into deficit
“Personal income tax revenues were down $450 million from projections. More specifically, a majority of the decline in income tax receipts is from the withholding and finals portion of the tax. which is tied to capital gains and investment income. That part ended up being down 8.9 percent.”
Connecticut Mirror, May 2, 2017: House speaker: Deficit too great to rule out income tax hike
Connecticut’s Democrat-controlled legislature is now looking for ways to replace the lost revenue. One likely option — increases in the income taxes paid by the middle class. ” ‘As the hole in the budget grows, the options become more limited,’ [House Speaker Joe] Aresimowicz said. With that in mind, the speaker added, he couldn’t rule out income tax hikes on the wealthy or on the middle class at this point.”
The (Tacoma) News Tribune, April 6, 2017: House Democrats want a capital gains tax to raise money for their budget plan – is it even legal?
“The state Supreme Court has ruled in the past that income taxes are a form of property taxes — which must be applied at a flat rate under the constitution. The capital gains tax measure isn’t uniform because higher earners pay more, Republicans say.”
Jared Walczak, Tax Foundation, in Tri-City Herald, May 12, 2016: Capital gains taxes are too unreliable to fund education
“Large swings in capital gains are not uncommon, making them a particularly risky tax base. Nationwide, they are the single largest culprit behind state revenue forecasting errors. Relying on such a volatile revenue source to boost educational expenditures is risky. A revenue stream that can decline this rapidly is not one that can be relied upon to support meaningful long-term investments in public education.”
Jared Walczak, Tax Foundation, March 24, 2017: A capital gains tax would be more volatile than Washington state revenue projections suggest
Posting notes that simplistic fiscal estimates from the Washington Department of Revenue make no mention of the fact that tax collections would plummet in the next downturn. “There is little one can say with confidence about capital gains tax revenue. The only thing we can be reasonably sure of is that it won’t look anything like this.”
Washington Policy Center, April 2017: State revenue departments describe capital gains income taxes
An exhaustive survey by Jason Mercier of the Washington Policy Center reveals that no other state has a standalone tax on capital gains income – all states that tax capital gains income do so as a component of their state income taxes. None attempt to conceal the purpose by calling it an “excise tax.”
Los Angeles Daily News, Dec. 1, 2016: California budget analysis calls for caution
An editorial in the Los Angeles Daily News observes that heavy reliance on high-earner taxes has created major problems for California. “The [California Legislative Analyst Office] notes that revenues from the personal income tax amount to about 70 percent of the General Fund, and that revenue source is highly dependent on capital gains. …That means California’s state revenue is overly dependent on high tech, and any sizable correction in that sector — even absent a general recession — will send state government tumbling into deficit spending again.”