Legislature adjourns in a final hour
23 Aug 2021
Last night just moments before midnight and the end of the regular 105-day legislative session, legislators passed their 2019-2021 biennial operating budget, narrowly avoiding a special session. When all was said in done, the Legislature passed an operating budget that spends $52.1 billion budget. For the first time in ten years, the Legislature adjourned a 105-day session on time without a special session.
Over the past several days the Legislature worked into the late hours of the evening to pass a number of priorities and bills that were tied to the budget deal that was made on Thursday morning between the House and the Senate. The days that followed were frantic as stakeholders across the state combed through budget documents to figure out what was in the 800-page document.
While democrats failed to address their capital gains tax that had been floating around all session legislators approved more than $830 million in increased taxes over two years and over $2 billion over four years, of which roughly half will be spent on operating budget costs. The other half will come from increasing taxes on big tech companies — including Amazon and Microsoft — and some service businesses, which will pay for higher education and workforce programs. While EASC sees the value in what is funded under this proposal, we are concerned about how this B&O increase will affect smaller businesses across our state.
About $244 million of the new revenue going toward the operating budget comes from a graduated real-estate excise tax, which raises taxes on sales of real estate priced at $1.5 million or above. The increased tax rate applies only to the portion of the selling price above $1.5 million; meanwhile, people selling homes priced at $500,000 or under would get a tax cut. An even higher tax rate will apply to sales of homes priced above $3 million.
Another $133.2 million comes from increasing taxes on large banks.
Other new revenue comes from taxing vapor products, as well as narrowing the sales tax exemption for out-of-state shoppers, such as people from Oregon who come to shop in Washington. Travel agents and tour operators also will be taxed at a higher rate under the plan.
Some other issues tackled in this session involved Governor Inslee’s proposals to move to 100 percent clean electricity by 2045, a “public option” for health insurance, toll authorization and bonding on I-405 to move projects throughout the corridor forward, adopting year-round daylight savings, multiple bills tackling the state’s housing issues, and historical funding for behavioral and mental health.
We will be doing a more in depth overview about the session next week to highlight wins for Snohomish County and some missed opportunities this year.