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Published on Friday, April 3, 2015

House, Senate consider budget proposals – shared revenue and the Public Works Trust Fund at risk

The House and Senate have each released, heard, and debated their own budgets. Here’s a recap of those events and how cities are impacted by each proposal.

House budget proposal

On Friday, March 27, the House Democrats released their 2015-17 state operating budget, SHB 1106. The proposal was heard in committee on March 30 and 31 before it was debated and passed by the full House on Thursday, April 2.

Overall, the $38.8 billion biennial budget proposal relies on nearly $1.5 billion in new revenue to help address the McCleary funding decision. For cities, the proposal:

  • Fully funds all state revenues shared with cities, including liquor revenue, SST mitigation, city-county assistance, and municipal criminal justice.
  • Does not divert substantial revenues from the Public Works Trust Fund and funds a modest loan list.
  • Provides cities and counties with $12 million in marijuana excise tax revenues.
  • Does not lift the cap on the city share of liquor profits.

To fund their budget, the House also released its revenue proposal, HB 2224. The bill generates revenue through changes to the state B&O tax, elimination of the sales tax exemption on bottled water and for out-of-state residents, imposition of a capital gains tax, and enactment of new nexus standards for collecting sales tax from out-of-state retailers. (Collecting sales tax from out-of-state retailers has been a long-standing AWC federal priority. More information about the House proposal is posted here.)

Senate budget proposal

On Monday, March 31, the Senate Republicans released their operating budget proposal, SB 5077, and heard the proposal in committee later that day. Senate floor debate began in the late afternoon of Thursday, April 2, and after considering 71 amendments, they adjourned in the early hours of Friday, April 3, without taking a vote on the overall budget proposal.

The Senate proposal uses existing revenue, spending cuts, and fund transfers to fund their $37.8 billion budget proposal. AWC is concerned about a number of cuts to city revenue and programs. Specifically, the two year budget proposal:

  • Reduces by $25 million city and county liquor tax revenue allocated by statute by continuing the 50% reduction in local liquor taxes from last biennium.
  • Takes nearly $10 million from the Fire Insurance Premium Tax distributed to 44 cities with LEOFF 1 obligations.

An estimate of how these proposals could impact your city is available here.

Additional resources

AWC’s side-by-side budget comparison

The latest from AWC on marijuana legislation

The latest from AWC on the Public Works Trust Fund

Legislative budget documents and summaries

What’s next

In the coming weeks, House and Senate leadership will seek to negotiate a budget that both parties can agree. In Olympia, there’s dwindling optimism that that will happen before the Legislature is scheduled to adjourn on Sunday, April 26.

Categories: Budget & finance