Tax Relief

Inslee’s funds: no tax break, $ Four billion enhance in deliberate spending

There were no tax breaks for Washingtoners in Governor Jay Inslee’s proposal for the 2022 supplementary budget, which includes more than $ 4 billion in overspending.

Washington state doesn’t have high taxes, Inslee said. He said the state is facing several crises – the COVID-19 pandemic, climate change, homelessness, salmon recovery – that are making it a bad time to cut taxes, and it is “tempting to think differently “.

“Some would say that an extra fiscal year should provide a few quiet months in Olympia, but nobody has that luxury given the number of pressing concerns our state is facing,” said Inslee during the opening moments of the Thursday afternoon press conference at the he revealed his supplementary budget. “We must act now on issues that the pandemic has highlighted and exacerbated. It may be a short session, but we have a long list of things we need to achieve together. “

The governor’s supplementary budget builds on the $ 59 billion two-year spending plan approved by the state legislature earlier this year, which includes approximately $ 1.3 billion in unspent federal pandemic-related relief funds.

Inslee focused on the unique nature of federal funding to defend the lack of tax breaks in his budget.

“Well, it’s a simple fact that the need for spending will continue, but the income will go away,” said Inslee. “When those who get the stars in their eyes think that this revenue will continue to flow, it is completely unrealistic.”

He did not specifically address the fact that the state is seeing a steady recovery in revenue.

Last month, the state’s Economic and Revenue Forecast Council projected revenue collections for the 2021-2023 biennium to be $ 898 million above the September forecast. Forecasts for the 2023-2025 biennium rose by more than $ 965 million.

This means total revenue is up $ 3.6 billion for the current biennium and $ 4.1 billion for the next biennium compared to the first annual forecast in March.

Inslee’s proposed budget includes both one-time and new federal funding, as well as other funds, to provide nearly $ 1 billion for the transportation budget, including $ 324 million to electrify the ferries and $ 40 million to attract and retain by ferry staff.

He also plans to reinvest nearly $ 1 billion in K-12 savings, realized due to declining enrollments during the pandemic, to increase the number of school nurses, social workers, counselors and psychologists.

Inslee tabled several budget proposals earlier this week before its supplementary budget was announced Thursday, including $ 815 million to fight homelessness across the state, $ 626 million for climate change proposals, and $ 187 million for efforts to restore salmon.

Jason Mercier, director of the Center for Government Reform at the Washington Policy Center, criticized Inslee’s budget for lacking tax breaks.

“With massive increases in revenue, I was hoping that the governor’s tax cut heart would reach three sizes today and that he would finally embrace the tax cut fever that has gripped the rest of the country,” he said. “Unfortunately, it is clear that the governor may not be able to offer tax breaks because he believes Washington taxes are fine and the state is over-spending. Now let’s see if lawmakers agree with the governor that spending should continue to rise, including pay rises for state employees, while Washingtoners don’t get tax breaks despite continued billions in revenue growth.

There was some good tax news at the press conference.

Inslee said his budget is putting $ 600 million back into the Rainy Day fund, in addition to the $ 574 million required for the current two-year budget. Over the next four years, the state’s reserves will return to pre-pandemic levels, Inslee said. The state’s total reserves are projected to exceed $ 2.5 billion by the end of the current biennium, Inslee added, and $ 2.8 billion by the end of the next biennium.

The Democratic-controlled House of Representatives and the Senate will each come up with their own budgets during the 60-day legislative term that begins Jan. 10.

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