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Note: WSSDA's weekly video update is now
available on our
YouTube channel.
Just prior to the preparation of Thursday’s Update,
HB 2776 was added to the Senate’s list of consideration;
however, before it was acted upon the Senate recessed to
convene a meeting of the Senate Ways & Means Committee.
As we reported yesterday, the Senate Ways & Mean
Committee met to hold a public hearing on a substitute
version of
SB 6250, which would impose a “high earners” income
tax, subject to a vote of the people. The proposed
referendum would also repeal the temporary three-tenths
of a cent increase in the sales tax (assuming the
Senate’s revenue proposal was enacted) and also reduce
the base state sales tax by one half-cent. We will
provide more on this issue below.
When the Senate reconvened last night, one of the
bills they adopted was HB 2776.
HB 2776 is the Quality Education Council bill that
would adopt new funding distribution formulas for K-12
education. Adoption of this bill would begin the
implementation of last year’s
HB 2261 (Basic Education finance reform) by
attaching numerical values to allocations in the
prototypical funding formula. The Senate-adopted version
of this QEC bill is different than the House version (SB
6760, which was amended by the House Ways & Means
Committee, but has not yet been acted upon by the full
House) and there are now questions about whether the two
houses can agree on a final bill. HB 2776 was adopted by
the Senate with no dissenting votes and now returns to
the House.
On Friday, the House finally took up
SB 6696, the education reform bill intended to
enhance Washington’s application for federal “Race To
The Top” funds. The bill would make changes to
teacher/principal evaluations; changes teacher tenure
provisions; expands options for educator certification;
and implements the State Board’s statewide education
accountability system. As adopted, SB 6696 also includes
language to implement the new prototypical school
funding model (HB 2776/SB 6760). The bill was adopted
with a vote of 76-22 and now returns to the Senate.
Similar to HB 2776 discussed above, there are questions
about whether the two houses will be agree to a final
compromise bill. Even though much work with be done to
secure passage of SB 6696 in the remaining days of this
session, many legislative observers are beginning to
believe this bill will die. Review
TVW’s Blog for some of the key points of today’s
debate.
Above, we noted yesterday’s Senate Ways & Means
Committee public hearing on a new income tax plan. This
caught most people off-guard, as it had not been talked
about all session. Today brought more surprises.
Yesterday, the Senate Ways & Means Committee scheduled a
meeting for today, but failed to provide notice of what
would be on the agenda. Many assumed the Committee would
take action on it’s newly released income tax plan, but
when the agenda was released this morning three bills
were on the executive session list:
SB 6578 (regarding a new permitting process – no
impacts on K-12), along with SB 6874 and SB 6143.
SB 6874, one the bills in the Senate’s original
revenue package, would increase the cigarette tax from
$2.25 per pack to $3.25 per pack, raising an expected
$86 million. The new revenue would go into a “Basic
Health Plan stabilization account.” The tax would go
into effect June 1, 2010. The bill only makes the
appropriation to the stabilization account for 2011 —
meaning the Legislature could use the money for other
purposes beyond 2011.
SB 6143 was originally introduced last session as a
“Title Only” bill and never received a public hearing —
this year or last year — so it was a bit of a
head-scratcher about what this bill would do and why it
was on the executive session list. A Proposed Substitute
of SB 6143 was reviewed in Committee which combines two
of the bills (SB
6873 – tax loopholes and
SB 6875 – sales tax increase) from the Senate’s
original revenue package. In short, the bill: eliminates
a number of tax loopholes or tax exemptions; and imposes
a temporary three-tenths of a cent increase in the state
sales tax. Similar to SB 6875, the bill also establishes
a Working Families’ Tax Exemption for low-income
citizens. In the middle of this bill being amended for
final adoption by the Committee, the Committee recessed
to return to the Senate floor to continue adopting bills
before tonight’s 5:00 pm cut-off deadline. Shortly after
the full Senate adjourns this evening, the Committee
will reconvene, finalize amendments to the bill and,
presumably, will adopt the bill.
What does all this mean for next week’s scheduled end
of the session? It is unclear at this point.
Although we know that House and Senate budget-writers
(and leadership) have been meeting together, it remains
unclear whether there is any type of agreement on a tax
package (or budget) between the two houses. It is
assumed an agreement has not been reached, however,
because it does not yet appear that there is agreement
WITHIN either house, let alone an agreement with the
other house. Following tonight’s 5:00 pm opposite house
cut-off, most of the legislative attention will turn to
finalizing a budget and tax package. In fact, it is
expected at least budget-writers will work extensively
through the weekend in the hopes of reaching an
agreement as quickly as possible. Although Sine Die does
not arrive until midnight on Thursday, March 11, much of
the groundwork for the end of session must be completed
much sooner than that. Most legislative observers
believe if a budget/tax plan does not come together by
Monday (or perhaps Tuesday morning at the latest) a
Special Session will be needed to complete business.
This brings up an interesting situation, however.
Many predications, threats and scare tactics will be
tossed about in the coming days. One interesting
possibility was put on the table by Rep. Jeff Morris,
the House Speaker Pro Tempore. In a
conversation with TVW, he discussed the possibility
of the Legislature adjourning with no budget adoption.
Because the state’s two-year budget in already in place,
having been adopted last session, a supplemental budget
does not necessarily have to be adopted. Of course, the
state has a $2.8 billion budget problem to address. If
no supplemental budget was adopted, Washington would run
out of money later this year (State Treasurer Jim
McIntire has warned that Washington’s “cash” would run
dry in September without new revenues or reductions in
budget expenditures). At that point, the governor would
have the authority (and the legal obligation) to
implement across-the-board budget cuts. It does not seem
that this scenario is very likely; however, it could be
a scary enough possibility that it could drive
legislators to agree to a budget/tax plan that many of
them are not very comfortable with. The question to
hold-out legislators could be: would you rather adopt a
budget with too many program cuts, or go home without a
budget and force the governor to make across-the-board
budget cuts? Truly, this is the time in session
which the Olympia-regulars call the “silly season.”
Finally, just a quick note that the Senate finally
released its 2010 Supplemental Capital Construction
Budget proposal today. For details, please see the
Legislative Evaluation & Accountability Program
Committee budget page. We will also provide some
information in Monday’s Update
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