In Idaho

The Idaho Legislature adjourned officially on April 11th after a long and arduous debate over a number of issues, the most prominent of which was a Transportation Funding Bill.  Unable to agree the Senate and House finally convened a conference committee which hammered out the final bill.

The final bill includes $95 million in new funding, requiring increases to vehicle registration fees, an operating registration fee for commercial and farm vehicles, institution of a n electric and hybrid vehicle fee, and a 7 cents a gallon gas tax increase.

Unfortunately ABC’s bill HB 119, which would have put some critical new rules around Idaho’s liberal CM/GC legislation, passed out of the House Business Committee, but failed to make it to a full House vote.  ABC will work on the bill during the interim and expects to bring it back next year.

The Idaho Legislature convened to deal issues surrounding the child support enforcement system, with a very short expected session.

ABC Sadly Notes Passing of Former Idaho State Representative Frank Henderson

Businessman, and longtime public servant, Frank Henderson of Post Falls passed last week at age 92.  Former State Representative Henderson truly was a champion of free enterprise and the Merit Shop, and was instrumental in helping to pass the ABC backed bills outlawing union-only PLAs on Idaho State projects, along with many other pro-jobs and pro-small business bills over the years.

Rep. Henderson will be missed at so many levels, whether it be in local or state government, and by all friends and family.

In Washington State

Last week the Washington Legislature began what could be a 30-day special session.  The primary items on the agenda for the special session are the three budgets for the 2015-2017 biennium—operating budget, transportation budget and capital budget.  After a brief flurry of committee hearings and floor debate most legislators headed for home while only budget negotiators remained in Olympia for the first couple weeks of the special session.

OPERATING BUDGET

The proposed Senate Republican operating budget for the 2015-17 biennium spends a total of $38 billion and represents a $4.1 billion increase from current spending levels in the 2013-15 biennium.

The House Democratic budget proposal would increase policy spending by $2.4 billion for the biennium over carry-forward spending.  To meet its new spending target, House and Senate Democrats propose a mix of new revenue increases of approximately $1.5 billion for the biennium.

Both budget proposals put $1.3 billion in additional spending toward meeting the obligations established by the state Supreme Court order holding the Legislature in contempt in the school-funding case called the McCleary decision.

The differences in spending levels among the operating budget proposals, and the historic trend in operating budget expenditures, are set out in the following chart (also attached).  The spending levels in the Senate, House and Governor’s versions of the operating budget contain the largest increase in new spending in actual dollars (not as a percentage) in two decades.

Biennium

Dollars in Millions (Near General Fund-State+)

Change in Millions

1993-95

16,527.7

1995-97

18,438.7

1,911.0

1997-99

19,986.8

1,548.1

1999-01

22,285.3

2,298.5

2001-03

24,480.0

2,194.7

2003-05

25,579.2

1,099.2

2005-07

28,938.0

3,358.8

2007-09

32,562.8

3,624.8

2009-11

30,384.1

(2,178.7)

2011-13

31,245.8

861.7

2013-15

33,794.1

2,548.3

2015-17--Governor

38,992.2

5,198.1

2015-17--House

38,967.2

5,173.1

2015-17--Senate

                                  37,950.0

                    4,155.9

 

OPERATING BUDGET REVENUE PROPOSALS

Even without new revenue measures, the operating budget is slated to collect an additional $3 billion under the existing tax system—a nine percent increase in revenue from the current biennium.  In order to support a spending level nearly $1.1 billion more than provided for in the Senate-passed budget, Governor Inslee and Senate and House Democrats suggested a variety of new taxes.  These can be summarized as:

1)  A new capital gains tax;

2) A permanent increase in the state’s business and occupation tax (B&O) on services from 1.5% to 1.8%;

3)  A new carbon-pricing effort based on a carbon tax; and

4)  Seven current tax exemptions proposed for elimination that impact tax rates or exemptions applicable to travel agents, resellers of prescription drugs, royalty income, extracted fuel, bottled water, nonresident purchasers and REET exemption on foreclosure sales.

TRANSPORTATION BUDGET

The Senate passed a $15.0 billion supplemental transportation funding package supported by an 11.7-cent gas tax increase along with several reform bills.  The House Transportation Committee has approved a similar gas tax increase, but its choice of projects is meaningfully different than those approved in the Senate bill—and the reform bills have largely stalled in the House.  Senate and House transportation budget negotiators continued to meet this week working out details on both a no-new-revenue carry-forward budget and one also that would be built on the new revenue from a possible gas tax increase.

CAPITAL BUDGET

Both the Senate and House of Representatives have put together biennial capital budget proposals for about $3.9 billion in spending in 2015-2017.  The House and Senate versions of the capital budgets are both bipartisan within their respective chambers, although there are a number of differences in priorities that need to be negotiated between the two chambers.