Tax loopholes: Did you know...

Washington State gives the oil industry about $3 million a year through a tax loophole based on how gasoline was transported back in the 1930’s. It’s completely outdated and even they have admitted they don’t want or need the exemption anymore.

Fifteen years ago, the Legislature tried to entice out-of-state prescription drug companies to build warehouses in Washington by giving them a tax break. The plan didn’t work out as originally intended. Out-of-state companies are getting the tax break even if they don’t have warehouses in Washington. In other words, we’re giving away $15 million in tax loopholes for no reason.

Washington State gives away $32 million a year to public utilities through a 1935 tax loophole. This exemption was created to comply with a U.S. Supreme Court ruling that has since been overturned.

When you travel to another state, you help support their schools and other needs when you buy goods and pay their sales tax. How much do out-of-state residents pay in sales tax when they buy items in Washington? ZERO. That tax loophole costs Washington taxpayers $32 million a year.

These are just a few examples of the 640 tax loopholes our state hands out to businesses each year. According to the Washington Budget & Policy Center, these tax loopholes cost Washington taxpayers over $10 BILLION per biennium – that’s about one-third of the total state budget.

Last week, the Senate unveiled a budget proposal that added 15 new tax loopholes to the books, which will cost taxpayers over $11 million. How many did they eliminate? ZERO.

Tax breaks themselves are not inherently bad things. Many serve the people well. But there are also several tax loopholes, like the 1939 fuel spillage loophole, that are outdated and unneeded. Because most do not have expiration dates, they’ll remain on the books unless the Legislature repeals them.

Budgeting is all about priorities. By preserving unneeded tax breaks, the Senate budget prioritizes corporate profits over kids and working families. It doesn’t have to be this way. We can do better.

House Democrats will unveil our budget proposal on Wednesday. In our proposal, you will see kids and working families come first.

Check out our website for a Top 10 list of reasons why the Senate budget is bad for kids, middle class families, and our future.



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The $2 billion budget myth

Let's say you drive your car about 100 miles a week as part of your job responsibilities. Your boss gives you $50 a week to cover your gas expenses. Then one day your boss says, "Good news, I'm increasing your fuel stipend to $60, but we're also doubling your route to 200 miles."

While the stipend increase would be welcomed, is that really good news? The added miles would more than wipe out the extra $10 a week.

This is the kind of argument you'll hear from some lawmakers and advocacy groups over the coming weeks as budget negotiations heat up. They argue that the state has $2 billion more in revenue this budget cycle compared to the last one – like your gas stipend going from $50 to $60 per week.

Therefore, as the argument goes, we can balance the budget, meet our McCleary obligations, and avoid deep cuts to vital services all without new revenue.

While it is true that our revenues are up about $2 billion, only looking at this side of the equation is fiscally imprudent and misleading.

This argument conveniently leaves out the other half of the equation, like the part about adding more miles to your route. Our expenses have also increased by more than $2 billion since the last biennium.

We have more kids in public schools, more students enrolling in higher education that need financial assistance, and more low-income families and seniors that need medical care.

In other words, it costs more this year to run the state than it did last year. Despite having more money this year, our revenues are not keeping up with expenses.

Based on current expense and revenue projections, the state budget is about $1 billion short of paying for our obligations. When you add our McCleary obligations, we're about $2.3 billion short.

We are not going to find $2.3 billion in cuts alone. We've cut $12 billion from the budget since 2008. House Democrats are pleased to see Governor Inslee's call for closing some tax loopholes to balance the budget and fund education for our kids.

Read this story in Spanish.

State of the Judiciary at 11:30 today

House members will head over to the Senate chambers this morning to for a joint session, during which they will hear a "State of the Judiciary" address by Chief Justice Barbara Madsen.

Chief Justice Madsen is the second woman in our state's history to preside over the state supreme court.

You can watch the address on TVW.

Read this story in Spanish here.

This is the legendary Hopper, where bills are born

Staff at the Code Reviser's office stamp a bill after it's put in the Hopper

You’ll hear lawmakers talk about “dropping a bill” or “putting a bill in the Hopper.”

This is what that actually means. Staff at the Code Reviser’s Office take draft legislation from lawmakers, stamp it and make sure the text is in the proper format to turn into possible law. That’s tougher than it sounds, because the staff must look up what possible changes any legislation makes to all possible existing laws, then cross out words, sentences or entire sections of existing laws and show exactly what would replace them.

You can learn about any proposed legislation this session by going here.

Read this story in Spanish here.

More scenes from opening day in Olympia

It's been about 24 hours since legislators took the oath of office yesterday. Here are just a few of our favorite shots from opening day action...

Reps. Roger Freeman and Dawn Morrell rise for the the oath of office (photo by Linda Barnfather)

Rep. Jamie Pedersen discusses gun control legislation with KIRO's Essex Porter

Reps. Joe Fitzgibbon (l) and Marcus Riccelli gather in the rotunda prior to taking the oath of office (photo by Linda Barnfather)

Speaker Chopp makes a few last-minute updates to his opening day speech

(L to R) Seatmates Reps. Kevin Van De Wege and Steve Tharinger, along with Rep. Derek Stanford following opening day ceremonies (photo by Linda Barnfather)


Read this story in Spanish here.

Citizen-lawmakers get to work

The founders of Washington state wanted part-time lawmakers instead of full-time politicians, so they set up the House and Senate to only meet during the winter, and to have citizen-lawmakers who'd get their work done and go back home to work as farmers and firefighters, teachers and nurses.

More than 100 years later, our state still has citizen-lawmakers like Rep. Tami Green (D-Lakewood), who works as a registered nurse when she's not in Olympia serving as the Majority Floor Leader.

Here's Rep. Green on the first day of the 2013 session:

Photo by Linda Barnfather

And here she is on her last day of work a nurse, before coming down to Olympia:

Rep. Tami Green on her last day of work as a nurse before the beginning of the 2013 legislative session

Read this story in Spanish here.

“I’m in for a whirlwind for sure”

Rep.-elect Monica Stonier

Truer words were never spoken by a freshman lawmaker. That statement was from Rep.-elect Monica Stonier of Vancouver on this week’s edition of TVW’s The Impact.

House Democrats are welcoming nine new members – and one returning member - to our caucus to kick off the 2013 legislative session next week. Check out the video below to see what it’s like for a new lawmaker to get ready for the whirlwind that is the legislative session in Olympia.

You can also hear Rep.-elect Stonier in this week’s edition of the HDC Capitol Ideas podcast.

Pair of 46th Legislative District Town Halls set for Saturday, Jan. 12

Rep.  Pollet

Come one, come all! Sen. David Frockt, Rep. Gerry Pollet, and Rep.-elect Jessyn Farrell are looking forward to hearing from their 46th Legislative District neighbors in one or both Town Hall meetings next Saturday morning and afternoon, Jan 12. The three Democratic lawmakers will meet with interested citizens:

• From 10 a.m. to noon in the cafeteria at North Seattle Community College. North Seattle Community College is located at 9600 College Way N., Seattle.

• From 1 p.m. to 2:30 p.m. on the Upper Level at Third Place Commons in the Town Center at Lake Forest Park. The Town Center is located at 17171 Bothell Way N.E., Lake Forest Park.

Rep.-elect Farrell

Frockt, Pollet, and Farrell welcome discussions about these and additional key issues they will join other legislators in facing this year in Olympia:

• Funding our K-12 schools.

• Strengthening access to our colleges and universities.

• Preserving health care for our children, and for our disabled and elderly fellow citizens.

• Developing our transportation options.

Sen. Frockt

For more information, contact either Sen. Frockt at 360-786-7690, or Rep. Pollet at 360-786-7886.

Education a top priority for House Democrats

"Building strong families"

"Strengthen communities"

"Investing in our youth"

These are just a few of the themes emanating from today's House Democratic Caucus advance. The members are meeting to build the caucus agenda for the 2013 legislative session.

Education is the prevailing topic. House Democrats are working on several ideas that will fully fund education, reduce the high school dropout rate, close the opportunity gap, make college more affordable, and invest in workforce development and training programs that will prepare Washington residents for high-quality, family wage jobs.

The 105-day session begins January 14, 2013.

To read this story in Spanish, click here.