Despite a mountain of cash and bipartisan proposals to ease the state’s tax burden, lawmakers this year missed their chance to offer Washington families and employers meaningful and widespread tax relief.
Olympia’s budget framers had a record budget surplus, providing the perfect opportunity to ease the burden on employers and taxpayers across the state. In mid-February, state officials released the latest economic forecasts and revenues rose again, this time to $2.8 billion. This was in addition to multiple previous forecasts showing strong growth.
Between the increase in the state treasury and a $2.1 billion drop in the cost of continued services, lawmakers had about $14 billion in surplus to work with as they entered the final days. of the legislative session, not to mention the billions in one-time federal relief funds and state reserves.
All of this meant there was never a better time for budget writers to champion the economy and provide much-needed tax relief and support to employers and employees in Washington as they struggle. faced with dramatic increases in the cost of gasoline and rising inflation throughout the economy.
We’ve seen lawmakers in other states — both Democrats and Republicans — facing large budget surpluses, enacting a variety of tax cuts, so it’s particularly disappointing that our lawmakers in Washington have focused so intently on spending and could not find a way to give back some of the surplus to allow employers to reinvest in their businesses and create jobs.
The Stateline website reported that in Illinois, Democratic Gov. JB Pritzker wants to freeze gas taxes for a year, suspend food taxes for a year and reimburse homeowners up to $300. Lawmakers in New York, Maryland, South Carolina, Mississippi, Connecticut, New Mexico and Iowa, to name a few, were also debating various forms of tax cuts. taxes.
Here in Washington, lawmakers have introduced tax relief bills this year. The proposals include Senate Bill 5957, which would have roughly halved the business and professional (B&O) tax for manufacturers. Given the unanimous passage last year of a bill calling for the state to double manufacturing in Washington in 10 years, this would have been a particularly timely decision.
“Now is the year to do it,” said the bill’s sponsor, Sen. Mark Mullet, D-Issaquah.
Other tax relief proposals include Senate Bill 5932, which would have reduced the state sales tax by 1%, and Senate Bill 5769, which would have eliminated the B&O tax for the manufacturing, repealed the capital gains tax and provided significant property tax relief.
While it’s true that the past two years have been good times for the Treasury and for some businesses, it’s by no means a universal experience. Some employers, especially small businesses, have experienced serious difficulties. While some recover, they have not recovered.
One of the rare positive points of the last two years is the good performance of the State budget during this period. That means lawmakers had a unique opportunity to use some of the state’s surplus to help those hardest hit and make smart investments that would have allowed the economy to really take off.
At the start of this year’s legislative session, Washington was on a three-year tax streak that has seen lawmakers levy 22 different taxes that will generate $40 billion over 10 years.
It is hard to imagine a better opportunity to come than the one we have had this legislative session to give back to taxpayers and to be champions of the economy.
Legislators have been blessed to be champions of the economy. The opportunity was right in front of them, but unfortunately they passed it up.
Kris Johnson is president of the Washington Business Association, the state chamber of commerce and manufacturers association.