House-proposed capital budget, my bills, and the capital gains (income) tax

We're in the home stretch of the 2023 session. With just three weeks to go in April, the state's three main budgets—operating, transportation, and capital―are in the crosshairs of many debates taking place in Olympia.

Capital Budget

The House-proposed 2023-25 capital budget, a truly bipartisan effort, took several weeks of hard work and tough negotiations. As the lead House negotiator and ranking member of the Capital Budget Committee, it's my job to ensure the plan meets the needs of the entire state.

This session's House-proposed budget makes several meaningful allocations, including $400 million for the Housing Trust Fund and $893 million for behavioral health. Other sizeable investments include those for community infrastructure projects, K-12 school construction, and small school modernization funding.

Overall, House Bill 1147 appropriates $8.34 billion, $4.18 billion of which is from the sale of newly authorized, general obligation bonds. The remaining $4.15 billion is comprised of a combination of the reversion of previously authorized bonds, other dedicated funding sources, and federal funds. It also leaves $160 million in bond capacity for next year's 2024 supplemental capital budget.

• Current status: HB 1147 is scheduled for a vote in the House Capital Budget Committee this week. After approval, it will go to the Rules Committee to be scheduled for a vote by the House.

More than $175 million in 12th District capital budget funding is included in the proposed spending plan. It's gratifying to see projects across our region, including newly redistricted areas, receive significant proposed allocations.

Overall, mental and behavioral health remain top priorities for our district. Other investments include emergency response services, community resource centers, and K-12 school modernization funding. If approved by the Legislature, this plan will serve our communities well, encourage continued economic growth, and allow our district to thrive.

12th District projects in the proposal include:

• The Center for Technical Education and Innovation (Wenatchee): $45 million;

• Chelan Valley EMS: $11 million;

• The Center for Alcohol and Drug Treatment (Wenatchee): $19.6 million;

• King County Area Readiness Center: $6 million;

• Lake Chelan Food Bank Building Remodel & Addition: $2 million;

• Community Center at Lake Chelan: $1.7 million;

• Affordable Workforce Rental Housing (Leavenworth): $1 million;

• Fall City Business District Septic: $1.5 million;

• Wenatchee Valley YMCA: $1.03 million;

• Wenatchee Valley Museum Expansion and Redesign: $1 million;

• Snoqualmie Valley Youth Center Barn with Storage (North Bend): $231,000;

• Water Line Repair (Index): $628,000;

• North Fork Skykomish River 911 Extension: $420,000;

• Manson Fire Station: $206,000;

• Manson School District: $262,000; and

• Skykomish School District: $25,000.

Capital Gains (income) Tax

The Washington State Supreme Court recently broke with nearly a century of legal precedent by upholding the state's capital gains income tax. In the 7-2 ruling, the court asserted the capital gains tax is an excise tax, not a property tax, which the state constitution limits to 1% annually.

• The 7% capital gains (income) tax, approved by the majority party as a new tax in 2021, will impact the sale of stocks, bonds, and other high-end assets of more than $250,000.

In my opinion, this ruling is regrettable and, frankly, an unconstitutional conclusion on the part of the court. Although celebrated by many as a “tax on the rich,” the reality is letting this tax stand could (and probably will) open the door to future state income taxes. That possibility will cost the average taxpayer, like you and me, not simply those with higher incomes.

My Bills

Here's an update on my bills that are moving through the legislative process and are now in the Senate for consideration.

House Bill 1250 converts the Low-Income Home Rehabilitation Revolving Loan Program into a grant program. Established in 2017, the program provides deferred loans to rural, low-income households needing repairs and improvements on their primary residence for health, safety, or durability. The program prioritizes homeowners who are senior citizens, persons with disabilities, families with children aged five years or younger, and veterans.

• Status: The bill had a public hearing in the Ways and Means Committee the week of March 29. It now awaits scheduling for a vote by committee members.

House Bill 1501 is a constituent request bill. After a local resident's husband was killed in a tragic hit-and-run, she asked me to sponsor a bill that would help the family members of murder victims. My proposal seeks to provide 12 counseling sessions to the immediate family members of a homicide victim.

• Status: Approved by the Human Services Committee, the bill has now been passed to the Rules Committee, where it awaits scheduling for a vote by the Senate.

House Bill 1804 permits the participation in the public employees' benefits board for retired or disabled employees of counties, municipalities, and other political subdivisions.

• Status: Approved by the Ways and Means Committee, the bill has been passed to the Rules Committee, where it awaits scheduling for a vote by the Senate.

I'd like to close this update with a big “thank you” to everyone who took part in my recent 12th District Virtual Town Hall, co-hosted with my seatmate, Rep. Keith Goehner. We share a diverse, beautiful, and economically strong district. By working together, we can ensure the future of our communities is bright.

Please contact me if you have questions about the legislative process or other state government-related issues. It’s an honor to serve you.