According to Senate Majority Leader Andy Billig, D-Spokane, Washington’s tax structure ranks worst in the nation in tax fairness with lower income individuals paying nearly 18 percent of their income in taxes, while wealthy Washingtonians pay three percent.
If the Democrats really cared about tax fairness, why would they not take advantage of the state’s historically large revenue surplus and actually cut regressive taxes that affect low and middle-income people the most?
On both sides of the aisle, politicians appear to agree in principle that the tax system is unfair. The Senate proposal, like the House version released in March, includes revenue increases. However, these increases differ and focus on slowly restructuring the tax system.
One of the options to start helping in fixing the tax code is a graduated Real Estate Excise Tax which would bring in $421 million and is proposed separately from the budget in Senate Bill 5991. Currently, the Real Estate Excise Tax is at a flat 1.28 percent.
The proposed rate changes would begin at .75 percent for sales under $250,000 and end at 2.5 percent for sales over $5 million. There would be a tax reduction for sales under $250,000, no rate change for sales between $250,000 and $1 million, and the increase would be for sales between $1 million and $5 million. The house budget proposal had a similar Real Estate Excise Tax change, but rates differ.
The state Senate passed an amended version of their operating budget, totaling $52.5 billion for the next two-years with 31 in favor and 17 opposed on Friday, April 5.
K-12 education accounts for 60 percent of the increase in spending with increases of $4.5 billion and an additional $937 million in special education funding. Other major increases include behavioral health and long-term care.
One of the most hotly debated amendments was $1.4 million of increased spending for Gov. Jay Inslee’s security detail, tied, in part, to his presidential campaign. The amendment would have transferred any funding in the protection unit’s budget.
Those campaign expenditures should be reimbursed to the state by Inslee for his security costs while traveling on the campaign trail, or he should resign while running for office — the amendment failed with 25 opposed and 22 in favor.
Now, if we could only get the parties to agree on proactively changing the inequality of the tax codes which affect low and middle-income individuals who pay more than their fair share as wealthy Washingtonians continue to follow in the governor’s privileged footsteps.
The two chambers now move to budget negotiations for crafting a final version for the governor to sign into law. The legislative session is scheduled to end on April 28.