January 11, 2021
Today is the first day of the 2021 legislative session. At the annual Associated Press Legislative Preview last week, Gov. Inslee, House Speaker Jinkins, House Minority Leader Wilcox, Sen. Dhingra, and Sen. Short talked about the session.
There seemed to be agreement on the need to act quickly to provide relief, and that the rainy day fund will be used. Gov. Inslee said,
The needs of our citizens are so acute that we need the Legislature to take some early action to be able to distribute help to a variety of Washingtonians so we don’t have to wait until the final budget is concluded. I think there’s good reason to believe we can accomplish that to some degree, because people are hurting.
The governor’s budget documents note, “The governor will urge the Legislature in January to quickly pass legislation approving an additional $100 million in grants to assist struggling businesses and an additional $100 million in rental assistance to help both tenants and landlords.” He proposed using the rainy day fund for these purposes.
Speaker Jinkins said that House Democrats are “very willing to tap the rainy day fund.” They have been working on early action legislation, including:
- Releasing new federal funding from the December relief package (including funds for vaccines and testing/contact tracing; $25 million for food assistance; $300–$325 million for rent assistance and utility assistance; and child care grants).
- At least $120 million for business assistance grants. (It sounded like the speaker was suggesting that the federal relief package included funding for business grants, but I don’t think the states have a role in distributing the business grants that were in the federal bill. She may be talking about using state money for this purpose.)
- Business and occupation (B&O) tax relief so that businesses don’t have to pay B&O taxes on their Paycheck Protection Program (PPP) loans. (She didn’t specify a bill, but HB 1095 will be heard by the House Finance Committee on Thursday.)
- Waive property tax interest fees to businesses. (Currently, delinquent property taxes are subject to a 12% interest rate [RCW 84.56.020(5)].)
- Give counties more authority to reduce property tax rates for businesses.
Additionally, Speaker Jinkins said, “We definitely need to help out our school districts on transportation and enrollment funding.” But she does not expect this to happen in the first few weeks of session. (As I’ve written, K–12 caseloads fell significantly this year, which will affect future school funding. Gov. Inslee’s budget proposal books the savings from these caseload reductions.)
Minority Leader Wilcox said,
Every single day that goes by, people are closing down. So we really want to join with all parties and all caucuses to move the things that are possible to move forward as quickly as possible. And I’ve mentioned many times that we wish we would have been able to come in earlier and do these things. Representative MacEwen has a suite of bills that I’ve talked about quite a few times that directly impact the cash flow of business, and that’s how businesses survive; when the chips are down, is just pure cash flow.
Minority Leader Wilcox also said that since many businesses are expecting increases in unemployment insurance taxes, “we should use part of the rainy day fund to backfill that.” (More on using the rainy day fund here.)Categories: Budget , Economy , Tax Policy.