Here's an assessment from the Tacoma News Tribune:
The state House released a $44.7-billion spending plan Monday that relies on $3 billion in new revenue over two years, mainly from new taxes on capital gains and tax hikes for some businesses.Fine detail
The House plan would spend about $1.6 billion more than a rival proposal put forth last week by Senate Republicans, who proposed rejecting state worker contracts and making some cuts to social services to balance their budget.
Both spending plans would put about the same amount of new money into K-12 education in the next two years — about $1.8 billion.I also see some kind of "safety net" grants for charter schools who have more Special Education students.
To accomplish that, the House plan would enact a 7 percent tax on capital gains such as sales of stocks and bonds. Democratic leaders said the new tax would affect about 1.5 percent of Washington taxpayers — or about 48,000 people — and bring in about $715 million over two years. Sales of single-family homes and retirement accounts would be exempt from the tax.
An even bigger part of the House plan is a proposal to increase taxes on some of the higher-grossing businesses throughout the state, which would bring in about $1.2 billion in the next two years.
There is one large exception: About 2,300 businesses operating under a preferential tax rate would not see their rates change. That includes mega businesses such as Boeing.
Another money-maker for the House Democratic budget would end an exemption for some online sales, which is expected to bring in about $340.8 million in the next two years.
When it comes to higher education, the Democratic and Republican plans The House Democratic plan would freeze tuition at state colleges and universities for the next two years, while the GOP plan would tie tuition increases to increases in the state’s average wage.
More from Washington Democrats' press release:
Highlights included in the House Democratic Budget Proposal:
- $7.1 billion – Additional K-12 investments:
- The Learning Assistance Program to accelerate student growth and close the opportunity gap.
- Parent engagement coordinators because families play a critical role in student success.
- Guidance counselors to prepare the next generation for life after high school – college and career.
- Addressing the teacher shortage crisis by:
- Raising beginning teacher salaries.
- Investing in their ongoing professional learning.
- Fairly compensating teachers.
- Including teacher COLAs as part of basic education.
- $400 million – Higher education investments to freeze college tuition at current levels for all students and provide State Need Grant assistance to 6,000 additional students.
- $106 million – Expansion of quality early learning programs and childcare resources for working families.
- $350 million – Mental health investments to better integrate our health systems and ensure that people, especially children, get the help they need in their time of crisis.
- $428 million – Health care investments for public health, long-term care, and fighting back on the growing opioid crisis.
The budget proposal includes a revenue package that takes a step toward fixing the tax code and generates the revenue needed to pay for public schools and essential state services. Those proposals include:
Building Wealth for Working Families (Real Estate Excise Tax Reform)
- Homeownership is one of the best ways to move into the middle class. Homes are one of the only major assets the average American can afford to invest in for their retirement. This proposal changes the current real estate tax rate to a progressive rate that will lower costs for working families buying a home under $250,000 and raises the rate for homes over $1 million.
Ending the corporate tax break on capital gains
- Only nine states still allow the tax break on capital gains. This proposal introduces a 7% excise tax on the sale of corporate stocks, bonds, and other gains with exemptions to protect retirement accounts, single-family homes, and more. This tax generally affects less than 2 percent of Washington tax filers.
- Washington businesses are at a competitive disadvantage against out-of-state online retailers who don’t have to remit sales tax. The House Democratic proposal levels the playing field by giving online marketplaces a choice: They can either collect and remit retail sales tax for Washington sales, just like every other business. Or they can report specific sales and use tax data to the Department of Revenue for collection.
Small Business Tax Relief
- The current Business & Occupation tax is an imbalanced tax burden that must fixed. The plan introduces a 20 percent increase in B&O tax rate on the state’s highest grossing businesses, while also reducing the tax liability for 72 percent of businesses to zero. Additionally, this plan creates a new small business deduction of $100,000 to businesses with taxable revenue between $250,000 and $500,000.
Closing Costly Tax Breaks
- Washington state has 694 tax exemptions on the books, which results in roughly $30 billion in taxes not collected each year. In past years, we’ve proposed closing these tax breaks and we are continuing to push for these to be closed. They are not worth the cost to our kids’ education—we should prioritize our kids over unnecessary and costly tax breaks.
The House operating budget proposal will be heard in the House Appropriations committee today at 3:30 p.m. The revenue package will be heard in the House Finance committee next week.