OLYMPIA – Gov. Jay Inslee unveiled a budget proposal that would spend $2.3 billion more for public schools, strengthen mental health and child welfare systems, boost parks and implement tougher environmental rules.
He’d pay for it with a string of new and increased taxes, along with cuts and savings in existing programs.
Sen. Andy Hill, R-Redmond, chairman of the Senate Budget Committee, said Inslee was proposing a “massive tax increase” when he should make better education the priority and have the state live within its means for everything else.
“Tax increases should be the last resort, not the first response,” Hill said.
To make his 2015-17 operating budget balance, Inslee will propose a capital gains tax on individuals who receive more than $25,000 in those types of investment earnings, or couples with more than $50,000 in capital gains. It would exempt from those totals gains from the sale of a home, farm or forest land, or investment income from retirement accounts.
He also proposes collecting sales tax on bottled water, currently exempt because it is classified as food; an extra 50-cent tax on a pack of cigarettes; and collecting a “carbon tax” on industries that pollute. He would change the current sales tax exemption for some out-of-state shoppers to a refund that they would have to seek from the state.
The budget proposal also makes some cuts in current programs, but after years of budget cuts during the recession, Inslee said many state programs have been “cut beyond the bone” and new programs are needed to meet the needs of children, public schools and what he called the most vulnerable.
“It is time to reinvest in our state,” he said at a news conference to unveil details of the spending and tax plans.
Lawmakers are under orders from the state Supreme Court to improve public education, and voters last month passed a new law to further reduce class sizes. Many of Inslee’s education enhancements aim to address the court order. He’d reduce the number of students in kindergarten through third grade, pay for a cost-of-living increase for teachers and other school employees approved by voters but suspended since 2008, and spend more on early learning programs. He’d also continue the freeze on college tuition and increase the number of state-funded scholarships.
He’s asking for raises for state employees negotiated this year during contract talks with unions, saying they haven’t had a general increase since 2008. The state needs good people to run its programs, he said, and without better pay it risks losing them to jobs elsewhere.
Senate Republicans shot back that an Office of Financial Management study shows median wages for state workers increased last year, that turnover is low and more than half have worked for the state for at least 10 years.
House Democratic leaders didn’t commit to support any of Inslee’s proposals, but called it a good start for the upcoming session, which begins Jan. 12.
Rep. Ross Hunter, D-Medina, the chairman of the Appropriations Committee, said he wanted to study the plan but was encouraged that it “recognizes the need for more revenue to respond to our education requirements.” Rep. Reuven Carlyle, D-Seattle, chairman of the Revenue Committee, said the plan would spark debate on a fairer tax system for the state instead of the current one, which he labeled “a Ford Pinto in a Tesla world.”
Inslee said he’d listen to anyone who had a better idea.
“We’re going to have a good debate. There might even be a few arguments,” he said. “This is the start of a conversation, not the finish of one. I am open to ideas from all corners of the Legislature.”
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