What’s coming down the halls of Olympia in 2017?

By Diana Carlen
WAWG Lobbyist

On Monday, the Washington State Legislature began the 2017 Legislative session in Olympia. Because it is an odd-numbered year, it will be a “long” session that is scheduled to last at least 105 days due to it being a budget year. The primary focus will be producing an operating, transportation and capital budget for the state for 2017-2019 that begins on July 1, 2017.

The most pressing issue in crafting the operating budget will be how to address the McCleary decision, the 2012 State Supreme Court decision mandating that the state fully fund basic education. The Court has told the legislature unequivocally that it must adopt a funding plan, including revenue sources, by the time the 2017 session adjourns. The state currently remains in contempt for failing to adopt a funding plan and continues to accrue a daily fine of $100,000 that started accumulating in August of 2015.

Estimates are that the legislature must come up with as much as $3.5 billion over the next biennium for the funding plan, but there is no agreement on the actual amount. Finding that additional revenue is no simple task and is sure to dominate the discussions during the 2017 session. Disagreement on whether this requires new revenue (new taxes or raising existing taxes) or whether it can be done based on existing revenue is going to be contentious. This may lead to at least one special session, if not more, to come to agreement. Two years ago, it took until June 30 to adopt an operating budget, and the stakes are much higher this year.

Each December, the governor gets the first cut in proposing a budget before session begins. Gov. Inslee did this last month, which also included his plan for funding education. The governor proposed raising $4.4 billion in new revenue through a $25 per metric ton of carbon emissions tax, a 7.9 percent tax on capital gains in excess of $25,000, an increase in the B&O tax on services and repealing certain tax incentives.

While the governor’s proposed budget begins the budget discussions, many of the proposals have been rejected recently by the voters (the carbon tax) and the legislature (capital gains tax and closing of tax certain tax incentives) and will likely face significant opposition in the legislature. While the legislature will consider what is included in the governor’s proposal, each chamber will develop their own budget proposals during the legislative session and will eventually reach an agreement on a final 2017-2019 budget.

With the legislature needing to come up with up to $3.5 billion in the next biennium for education funding, the Washington Association of Wheat Growers (WAWG) will be vigorously defending agriculture’s ability to create jobs and compete in world markets by maintaining existing agriculture-based tax incentives.

The governor’s proposed carbon tax, which is now partially tied to education, will also be a big issue during the 2017 session. WAWG formally opposed the carbon tax initiative (I-732) that was soundly defeated by voters in November. WAWG was concerned that the regulatory costs to comply with a carbon tax would raise fuel, fertilizer, transportation and processing costs. As price takers, farmers cannot pass those costs on. The specific details of the governor’s new carbon tax proposal have not been released at the time of printing, but if it raises the same concerns as I-732, WAWG will oppose it as well.

Another important issue for the agricultural community in the upcoming session is a capital budget request to fund the new plant sciences building and the Washington Animal Disease Diagnostic Laboratory at Washington State University. WAWG was pleased to see that the governor’s proposed capital budget funded the construction of the plant sciences building, which will enable students and faculty to carry out more cutting-edge plant science research. However, the governor’s proposed capital budget did not include funding for the Global Animal Health Phase II, which is important to the agriculture community as it’s the state’s only accredited lab combating animal diseases, zoonotic diseases and food-borne illness.

Finally, water is likely going to be a hot topic before the legislature in 2017. This is due to the recent Washington State Supreme Court case known as the Hirst decision that restricts the use of exempt wells and severely restricts rural development in the state. Both the Senate and House held work sessions on this decision recently and heard about the havoc the decision is causing throughout the state. Several legislators have committed to introducing legislation to address the court case. WAWG will be actively following these discussions.

In sum, the legislature has a lot of work ahead of them for the 2017 session. WAWG will be participating in their annual Olympia Days on Jan. 17-19 to educate elected officials about the issues of importance to the agricultural community, and we look forward to the opportunity to engage with the governor and legislators.