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Dear Friends and Neighbors,
Hello from Olympia, where we are in the final week of the 2013 legislative session.
As I write this newsletter, late at night on Wednesday, April 24, the prospect of a special session looms. House and Senate operating budgets are about $1 billion apart with no sign of serious negotiations taking place before the end of session this Sunday. The governor is more concerned about breathing new life into a few of his deceased bills than he is about passing an important operating budget for this state.
If things pick up and there is more news in the final days of this regular session, I will send out an additional e-newsletter this weekend.
New district office open house
Please join Garrett Delano, my legislative assistant, and me at an open house at our new legislative district office on Friday, May 3 from 4:00 to 6:00 p.m. Our district office is located at 415 NE Cedar Street, Suite A in downtown Camas, near the corner of Fourth Avenue and Cedar Street. Refreshments will be served and I hope you can join us. Please RSVP to firstname.lastname@example.org or call (360) 786-7812.
House passes $900 million in new taxes to balance bloated budget proposal
On Wednesday, April 24th, the House passed House Bill 2038 on a mostly party line vote. This was by far the most offensive bill I have voted against this session. I stood up and spoke out against this bill from the House floor. There are numerous tax components – some new tax hikes, other taxes that are extended which were previously scheduled to sunset and still a few others where current tax exemptions are removed.
Probably the most harmful to Clark County is the repeal of the popular non-resident sales tax exemption. Clark is a border county to sales tax free Oregon. If this becomes law, Oregonians will stop crossing the river to patronize our merchants in Clark County and other border cities around the state because they will have to pay the same sales taxes we pay. For many businesses, a large percentage of their sales come from Oregonians.
Many aspects of this new tax proposal will hurt small businesses across Washington. In turn, these new taxes will hurt our neighbors, our friends and our family members. They will affect auto mechanics, truck drivers, grocers, pharmacists, software engineers, farmers, real estate agents, financial planners, printers, dry cleaners, and even the folks you hire to mow your lawn or clean your home. Many of these new taxes will result in fewer job openings, more layoffs and a slower economic recovery for our state. We cannot tax our way out of this recession yet that is exactly what the other party is trying to do.
Here's what House Bill 2038 does:
- Permanently extends the B&O tax on service businesses and increases the rate from 1.5% to 1.8%
- Increases B&O taxes on travel agents and tour operators from .275% to 1.8%
- Adds sales tax to all bottled water, even though voters repealed this law in 2010
- Repeals the high-tech research and development sales tax deferral program on start up companies in Washington
- Eliminates the public utilities tax deduction on interstate truck haulers and increases B&O taxes by 1.926%
- Eliminates most B&O tax exemptions for import commerce except for aerospace products (to protect Boeing which recently shipped 1,000 manufacturing jobs to South Carolina)
- Increases B&O tax on warehouses and resellers of prescription medicine from .138% to .484%
- Repeals a tax exemption on fuel produced by an extractor or other manufacturing process
After I left the legislative building for the day, I was so frustrated following the passage of this bill that I went for my second five-mile walk of the day to blow off some steam. The final speaker on the other side had the nerve to call this a “revenue package.” Are you kidding me? They cannot even call it what it really is: $900 million in new taxes. It made me very ashamed for them.
But wait, there's more. Keep reading.
Bad Bill of the Week
House Bill 2046 transfers all funds from the state's constitutionally protected “rainy day” budget stabilization account to the general fund for purposes of balancing a new, bloated, increased State Operating budget. I voted “NO” on this bill heard in the House Appropriations on Tuesday, April 23rd. Thankfully this bill requires a 3/5 majority in the House in order to pass. If this bill does becomes law, it would leave virtually no money in the state's reserve account. In other budget years, the legislature has left approximately $330 million which is about 8 days of reserve funding. To put things in perspective the state spends approximately $44 million dollars a day.
Can you imagine running your own personal or business checking account balance to zero? This is not a responsible budget practice.
But wait, there's more.
Follow up on transportation funding
Following last week's e-newsletter, I received quite a few emails asking about the 9.5 cent gas tax that I discussed which passed in 2005. I informed constituents that gas tax revenues were bonded to pay for dozens of mega projects all around the state similar to using a credit card. Many of my constituents wanted to know when those bonds will be paid off. So, I did some research.
The Treasurer's Office is actually still in the process of selling bonds secured by the 9.5 cent gas tax increase which started in 2005. The majority of the remaining bonds will be sold over the next four years and most of those bonds will be for a 25-year term. As such, it is reasonable to conclude that most of the bonds will be repaid by the year 2042. It should be noted that based on the bond model, we may still be selling some bonds in 2021-23, so repayment could extend into the year 2048.
Today, the majority party in the house wants to pass an additional 13 cent gas tax before we adjourn this session. So, I asked our experts in Olympia when the new bonds would be paid off from this proposed 13 cent gas tax.
If this new tax package is passed, the State Treasurer would authorize 25-year bonds. As such, if we assume all bonds relating to this package are sold in 2015, the bonds should be repaid in the year 2040. However, it is likely the state will not issue all of these bonds immediately and the issuance will probably stretch out over multiple biennia, much like the 9.5 cent gas tax bonds. In short, the majority party in the house wants to mortgage your gas taxes far into the future.
But wait, there's more. The bond bill (HB 1956) which pays for capital projects around the state instructs the State Finance Committee to consider issuing shorter-term obligations which would also affect the state's financial health and cash flow. I will talk more about the capital bond bill in next week's e-newsletter.
Former Gresham police officer provides insights on crime
This week, I received an in-depth email from a former Gresham police officer, thanking me for my comprehensive e-newsletters about crucial issues facing our community. He also thanked me for standing firm on “no new taxes”, including the gas tax and the others I have detailed in my weekly updates.
He went on to say how pleased he was to see that I am listening to the citizens in the Clark County area who have stated over and over they do not want “Max” light rail coming across any bridge design. He retired from the Gresham Police Department in 2008 and now serves as a police officer in the Salmon Creek area. Here's what he had to say about light rail and crime:
“I know from experience that light rail is a conduit for undesirables to new areas most of the day. Yes, it is a commuter train in the morning and afternoon, but then it becomes very problematic. The police force in the Portland area, combining Gresham, Gladstone, Washington County, Clackamas County, and Portland Police officers are not able to keep up with the crime and related incidents that are attributed to the direct presence of the Max train system. Just ask the Clackamas area residents how they like the train coming to Clackamas Town Center and how it has affected the overall community. It is not liked!”
This Clark County resident and law enforcement officer thanked me for proposing a reasonable Columbia River Crossing alternative. He closed his email by stating a third bridge with costs shared “equally” with Oregon and without any light rail made the most sense and is the desire of the majority of Clark County residents.
What struck me most is that he thanked me for my service and commitment to keep my promises. What kind of elected Representative would I be if I did not keep my word? There are times, as a member of the minority party in the house, that I feel very irrelevant. It's the emails like this one that keep me going day after day, to serve the great people of the 18th District.
Thank you to my legislative assistant
This week, I want to express my sincere thanks to Garrett Delano, my legislative assistant for his good work. National Executive Assistant Day was celebrated on Wednesday this week. This day on the calendar reminds me how important Garrett is to the successful day-to-day operations of my legislative office. I am honored to work alongside such a friendly, hardworking and conscientious person. Thank you, Garrett Delano, and thank you to all the other hardworking executive assistants who keep so many businesses, schools and other operations humming in Southwest Washington. Today, I salute all of you.
Run for local office
Candidate filing week begins on Monday, May 13th and closes on Friday, May 17th. I encourage qualified candidates to step up and run for local office. Serving on a City Council, School Board, Fire District or Cemetery District is a great way to get involved and have a positive impact on your community. This year, there are dozens of seats that will be on the ballot in Clark County. For more information about those races, go to ClarkVotes.org.
I will be a panelist for the Clark County Auditor's “Candidate Workshop” scheduled for Thursday, May 9, 6:30 p.m. at the Clark County Elections Office, 1408 Franklin Street in downtown Vancouver. This is an excellent opportunity to learn more about the nuts and bolts of successful campaigns. I hope to see you there.
As always, it's a pleasure to serve you.
"Protecting life, liberty and the pursuit of happiness!"
469 John L. O'Brien Building | P.O. Box 40600 | Olympia, WA 98504-0600
(360) 786-7812 | Toll-free: (800) 562-6000