By Diana Carlen
On Jan. 14, 2019, the Washington State Legislature will be back in session in Olympia for a “long” session that is scheduled to last 105 days. One of the primary tasks of legislators during a long session is to pass the state’s biennial budgets: operating, capital and transportation.
Democrats will control the agenda in Olympia after significantly increasing their margins in the November election. Democrats will control the Senate 28-21 and the House by 57-41.
On Dec. 13, 2018, the governor released his proposed operating, capital and transportation budgets for the 2019-2021 biennium beginning July 1, 2019. The governor’s proposed budget is a starting point in budget negotiations. The Senate and House will consider the governor’s budget and propose their own respective budgets during the legislative session and ultimately negotiate a final budget before the Legislature adjourns. The governor proposed a $56.4 billion budget for 2019-2021, which is a 21 percent increase in spending from the current budget of $44.6 billion. The increased spending in his budget proposal would pay for education, mental health, higher teacher and state employee salaries and environmental protections, including $1.1 billion in spending to help save the threatened Southern Resident orca population.
To pay for the investments laid out in his budget, the governor proposes using a portion of the state’s budget reserves in combination with revenue from one new tax and changes to two current state taxes:
- A new capital gains tax on the sale of stocks, bonds and other assets. The state would apply a 9 percent tax to capital gains earnings above $25,000 for individuals and $50,000 for joint filers, starting in the second year of the biennium. Exemptions are provided for retirement accounts, homes, farms and forestry.
- Increasing the state business and occupation tax on services from 1.5 percent to 2.5 percent, which would generate about $2.6 billion in the next biennium. This would apply to services provided by accountants, architects, attorneys, consultants and real estate agents.
- Changing the state’s real estate excise tax to help the state pay for court-ordered removal of fish passage barriers. Currently, the state tax on all property sales is 1.28 percent, regardless of the sale price. Under the new graduated approach, the rate on lower-valued properties (under $250,000) would be 0.75 percent, while the rate would be 2 percent for property sales over $1 million and 2.5 percent for sales over $5 million. The graduated rate would increase state real estate excise tax collections by about $400 million in the next biennium.
Some key policy priorities laid out by the governor and Democrats that the Washington Association of Wheat Growers (WAWG) will be following closely include protecting the lower Snake River dams and monitoring climate change policies proposed by the governor and key House Democrats. See more about these issues that WAWG will be monitoring on page 28.
Key priorities that WAWG will be supporting during the upcoming legislative session include:
• Pesticide safety. Access to pesticides is essential to keeping Washington agriculture productive and globally competitive, and proper training is essential for keeping workers and neighbors safe during pesticide use. A recent legislative pesticide task force found that the Washington State Department of Agriculture’s (WSDA) pesticide applicator safety training is effective, popular and underfunded to meet the existing demand. WAWG supports investing an additional $1 million in funding for WSDA Pesticide Safety Training to help keep workers and communities safe and farms productive.
• Completing the Washington State University (WSU) Global Animal Health Facility. The WSU Pullman campus has already received partial funding last biennium for the Global Animal Health facility in the capital budget, but an additional $36.4 million is needed to finish the project and maintain the only diagnostic lab in the state. WAWG supports completing this capital investment and appreciates that the governor’s proposed budget includes this investment.
• Enhancing short-line rail infrastructure. Short-line railroads are an important part of how many Washington farmers get their products to market and are an essential piece of infrastructure for rural communities around the state. WAWG supports additional funding to rehabilitate and expand Washington’s short-line rail system.
• Soil Health Initiative. Healthy soil is a foundational part of sustainable, productive agriculture across Washington. WAWG supports additional funding for the Soil Health Initiative to marshal long-term research, improved data and best management practices.
WAWG will be participating in their annual Olympia Days on Jan. 30-31 to educate members about the issues of importance to the agricultural community and looks forward to the opportunity to engage with the governor and legislators.