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Published on Friday, June 7, 2013

More on the House budget proposal

The House broke the budget stalemate earlier this week with the passage of a Democratic budget. The Senate will now consider its budget. With only a few more days left in this special session, it’s still unclear whether a final budget will be approved by the June 11 deadline.

The House-passed budget did not make further cuts to liquor or other state shared revenues and maintains funding for many of the programs cities care about. The most notable exception is the proposal to sweep the Public Works Trust Fund.

AWC’s comparison of this year’s budget proposals and their impacts to cities can be viewed here.

As part of their budget plan, the House also passed a number of revenue bills, including:

  • ESHB 2034 eliminates a number of tax loopholes, including the sales tax exemption for bottled water and eliminating the preferential state B&O tax rates for travel agents, tour operators, and resellers of prescription drugs. Additional revenue would be directed to the Education Legacy Trust Account.
  • E2SHB 1971, the telecommunications tax parity bill, removes the sales tax exemption for all residential phone lines, requires retailers to collect E911 taxes on prepaid wireless phones, and makes a number of other changes related to telecommunications. We previously wrote about this bill, which addresses the issues raised in the 2011 Sprint Spectrum v. Washington State Department of Revenue case and has significant financial implications for the state and local governments. The House passed the bill during the regular session, but the Senate did not consider it.
  • EHB 2036 changes the nonresident sales and use tax exemption into a remittance program – meaning out-of-state or out-of-country residents would have to pay sales tax at the time of purchase but could apply to the Department of Revenue each year for a refund if the tax paid exceeds $25. Additional state revenue raised though this approach would be directed to the Education Legacy Trust Account.
Categories: State budget
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