State operating budget $5 billion in excess

Everybody associates March 17 with St. Patrick's Day, that one holiday in which we are all encouraged to wear green. Around the Capitol last week, March 17 brought a different meaning of "green."

That morning, the state Economic Revenue and Forecast Council announced the first state-revenue forecast for this year showed a surprisingly large increase of $3.3 billion through the 2021-23 budget cycle and $5.2 billion over the next four years.

It is the largest positive quarterly forecast change on record. Since the state operating budget must balance over four years, legislative budget writers now have $5 billion more available in state funds than what was forecast in November.

To put into perspective what can be done with $3.3 billion, here are the two-year costs for familiar parts of state government:

• Developmentally disabled - $2 billion

• Community colleges - $1.7 billion

• Department of Corrections - $2.4 billion

• K-12 special education - $3 billion

When you factor in the week's very positive state revenue projection, along with about $10 billion in incoming federal stimulus funding, plus the healthy balance in our state's rainy-day fund, there is absolutely no need for the Legislature to raise taxes or create any new taxes, especially a state income tax on capital gains.

Unfortunately, we're seeing no signs from majority House Democrats that they might stop Senate Bill 5096, the Senate Democrats' proposal to create a 7% state income tax on capital gains. S.B. 5096 already received a public hearing in the House Finance Committee.

Because it's a fiscal bill, the committee has until April 2 to act. As I've mentioned in previous commentaries, some Democrats want to pass the state income-tax proposal and have it wind up before the state Supreme Court in hopes the current high court will break with decades of precedent and rule this proposal passes constitutional muster.

Senate Democrat budget writers are expected to release their upcoming two-year operating budget proposal this Thursday, March 25, with House Democrat budget leaders following with their own spending plan a few days later.

There is no good reason why either budget proposal should rely on a state income tax, but I'm not.

New carbon-tax plan

Sometimes it seems my Democratic colleagues never run out of tax proposals.

The latest example is Senate Bill 5126, which received a public hearing this week in the Senate Ways and Means Committee. Gov. Inslee and other proponents of S.B. 5126 are calling it the "Climate Commitment Act," but I'm afraid the only thing it will commit Washingtonians to is handing over more of their hard-earned money.

Under this bill, the state would set statewide emissions limits. The allowable emissions would decline each year.

Companies would purchase a "permit to emit" at an auction run by the stateDepartment of Ecology. It's estimated that $500 million in "revenue" would be raised by taxing people for the permit.

This is another bill that would punish people and companies, without any proof of even helping the climate. And judging by the 75-page fiscal note for this bill (compared to just a 10-page fiscal note for the state income tax proposal), this "cap and tax" bill is extremely complicated, which is never a good thing.

Unemployment numbers

Last week, the state Employment Security Department released January's county unemployment rates. For the six counties that are either entirely or partially within the 9th Legislative District - that includes Adams County - the latest unemployment numbers are a mixed bag compared to February 2020, which was the month before COVID-19 started hurting the economy.

Here are the numbers:

Adams, 6.9% in January 2021, versus 7.3% in February 2020

Asotin, 4.0% in January 2021, 4.2% in February 2020

Franklin, 7.9% in January 2021, 7.3% in February 2020

Garfield, 6.9% in January 2021, 7.0% in February 2020

Spokane, 6.7% in January 2021, 5.6% in February 2020

Whitman, 4.5% in January 2021, 3.9% in February 2020.

The bottom line is, we can't be satisfied with these unemployment numbers. When the recent federal stimulus checks are spent and that money goes away, we have to be ready to run on our own.

For that to happen, the governor and his administration need to do more to allow more businesses to reopen and fully operate, which will help restore more jobs.

– Sen. Mark Schoesler, R-Ritzville, represents the 9th Legislative District. Email him at [email protected].