Dear Friends and Neighbors,
Upcoming town hall
Please join me and Rep. Dan Griffey for a town hall meeting!
When: Saturday, March 14 from 2:00-3:30 p.m.
Where: The Pavilion at Sentry Park (Senior Center), 190 W. Sentry Drive, Shelton, WA 98584
We look forward to updating you on the 2015 legislative session, discussing issues important to you, and answering your questions!
We have reached a major milestone in the 2015 legislative session. As of today, we have passed the policy and fiscal cutoff dates. This means bills that didn't pass out of committee are dead for this session. For more information on cutoff, click here. While I am happy to see some bills “die,” there are others I would have liked to see move forward.
Here are two bills I am happy are still alive
House Bill 1219 would expedite permitting for bridges deemed structurally deficient. There are 130 structurally deficient bridges in Washington, and I believe we should look for ways to reduce the red tape in order to fix these bridges. As we saw with the Skagit River Bridge collapse in 2013, we can quickly and safely replace bridges by streamlining the process. It shouldn't take a catastrophic incident for government to work more efficiently.
House Bill 1559 authorizes the board of regents at Washington State University to establish, operate, and maintain a school of medicine. By 2030 our state will be facing a massive shortage of doctors. This is an important step to increasing access to medical care and reducing associated costs.
A cutoff casualty
A good bill that died is House Bill 1607. This bill would recognize hydroelectricity as a renewable resource. Hydropower should be a part of the discussion when we consider available options for a diverse and effective energy portfolio.
A more extensive list was produced by the House Republican Caucus on bills that are dead and alive. This is not an exhaustive list and does not fully reflect all of my legislative priorities, rather it is a snapshot of bills still moving through the process. You can read more here.
A much needed reform
We live in the most innovative and productive state in the nation. Our state produces the world's best airplanes, software technology, and is a gateway to economic opportunity. Yet, we are also ranked in the top five nationally for startup business failures by Forbes Magazine, and job growth outside of Seattle is stagnant. Many struggle to find work even as they hear the worst of the Great Recession is behind us. What's more, businesses are unable to expand and accelerate job growth across the state.
I believe it is time to address a major factor in this lack of growth, and reform Washington's business and occupation (B&O) tax code. Last week I introduced House Bill 2150 to modernize Washington's B&O tax structure. The B&O tax was first adopted in the 1930s, and in the years since has been amended and complicated by both parties. The system is outdated and a major obstacle to business growth in our state.
The current system has 50 classifications and 10 different rates, plus multiple exemptions and deductions, which many call loopholes. Sectors of our state economy have struggled to survive, expand and add family-wage jobs. I believe the B&O system is partially to blame. As a state we have picked winners and losers for decades. I believe it's time to put Washington businesses on equal footing and comprehensively reform our tax system, so businesses can survive, compete and grow.
My plan would give businesses the opportunity to deduct $500,000 of their gross receipts if that is greater than the other deductions the plan provides. This change alone would eliminate the B&O tax for over 285,000 businesses in the state. Businesses could also choose one of the following three deductions:
• Cost of goods sold;
• 30 percent of revenue; or
• Up to $200,000 per-employee compensation.
My plan maintains the aerospace and agriculture system currently in place. Further, we exclude non-profit organizations altogether.
You may be asking what this would do to our state budget. The impact of this reform is revenue neutral, meaning no money is taken out of the state coffers. We achieve this by consolidating the number of rates from ten to four, and having a service rate of 3.75 percent, retail/wholesale/manufacturing at 1.6 percent and telecommunications at 1.2 percent, while keeping aerospace at their current rate.
More information on exempted businesses by industry can be found here.
With this reform we make our states B&O tax fairer, flatter, and more flexible. We remove the tax burden on 285,000 businesses in our state with no impact on our state budget. We create a 21st century tax code that allows Washington state to lead nationally, and compete globally. And finally, we remove barriers to growth so that we can accelerate job growth and get Washington working again.
I look forward to this bill receiving a hearing in the House Finance Committee in the coming weeks.
Last week we received another update on the revenue being collected by the state. The Washington Economic and Revenue Forecast Council revised their last report and indicated revenue for the 2015-17 budget will increase by another $129 million. This is in addition to the $3 billion in increased revenue over the last budget.
In closing, I was honored to have my granddaughter visit the Capitol last week as part of the annual children's day celebration. It truly served as a reminder that we are here to ensure our children and grandchildren inherit a better state, country and world!
I appreciate you taking the time to read this update and I encourage you to contact me to share your thoughts on these, and any other issues you care about.
Together, we can make it morning again in America!