The second special session must adjourn by June 27. It remains to be seen whether a third, albeit short, special session will be necessary, since the Legislature must adopt, and the governor must sign, a new biennial budget by midnight June 30 to avoid a government shutdown.
A second special session of the Washington State Legislature convened Friday, May 29, as lawmakers have yet to reach agreement on a new, two-year state operating budget.
The Republican-led Senate Majority Coalition Caucus (MCC) released its latest budget proposal in the waning hours of the first special session, with the budget-writing Ways & Means Committee approving a framework spending plan on a party-line vote, without taking public comment.
House Democrats countered by releasing their latest budget bill in advance of a June 2 public hearing in that chamber’s Appropriations Committee. However, a committee vote on the plan scheduled for the next day was abruptly cancelled.
In an effort to break the impasse, Gov. Jay Inslee convened negotiations in his office. While the governor has softened his calls for a tax package, majority House Democrats continue to push for higher taxes and spending, focusing on a new state capital gains tax to fund their budget increase. The MCC remains opposed to any new or increased taxes, citing improving revenue forecasts as proof that new taxes are not needed. The two parties remain $500-700 million apart in their respective budget plans.
NFIB opposes tax increases, particularly those directly affecting small business.
In response to the various capital gains tax proposals being considered, NFIB has testified before the Senate Ways & Means Committee, and twice before the House Finance Committee, that nearly 80 percent of small business owners plan to fund their retirement from the sale of their enterprise, according to recent data. A new five or seven percent state capital gains tax, in addition to the existing federal tax, would unfairly penalize small business owners while other types of retirement investments would be exempt from the tax in each of the bills the committees have discussed. That point is now being widely repeated by other business groups and many legislators.
In addition, NFIB has submitted amendments to protect small business owners from this new tax. In fact, NFIB is the only business organization to do so, as noted by the chair of the House Finance Committee, Rep. Reuven Carlyle (D-Seattle):
The second special session must adjourn by June 27. It remains to be seen whether a third, albeit short, special session will be necessary, since the Legislature must adopt, and the governor must sign, a new biennial budget by midnight June 30 to avoid a government shutdown.
