Struggling to hammer out a state budget, Democrats and Republicans in the Legislature had differing views on a $327 million gain in Monday’s statewide revenue forecast for the 2015-17 budget cycle.
OLYMPIA — The parallel universes Democrats and Republicans have inhabited over the writing of the state’s two-year operating budget don’t seem to be inching closer together.
Exhibit A: The reactions to the latest state revenue forecast released Monday.
The forecast, moved up from June to give lawmakers more certainty in negotiating the budget, projects $327 million in new revenue in the 2015-17 budget cycle. It also adds another $79 million to the current 2013-15 budget.
Democrats question some of the forecast’s assumptions, including the large amount of marijuana tax money it assumes, and say new revenue is still needed. Meanwhile, a trio of Republican senators argue that the state’s budget situation is so rosy, lawmakers can now cut business taxes.
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The state Legislature’s 105-day regular session ended on April 26 with Republicans and Democrats failing to reach a budget agreement. Now, more than halfway through a 30-day special session, the budget negotiators are still far apart on how — and how much — to fund government.
The new revenue forecast “doesn’t completely solve the problem,” said Rep. Ross Hunter, D-Medina, the Democrats’ chief budget writer.
Hunter raised concerns over whether the marijuana tax collections assumed in the forecast will pan out. The forecast estimates the state will reap $374 million in marijuana taxes in the 2015-17 budget cycle and about $695 million in the 2017-19 budget years. The projected revenue from marijuana in the current two-year budget is about $53 million.
That forecast is overly optimistic, Hunter argued, because reforms to streamline the marijuana tax and regulatory system and limit local prohibitions haven’t yet been made.
Current marijuana stores “could be the size of a Costco and we wouldn’t be able to sell that much weed,” Hunter said.
“I don’t buy this for a New York minute,” said Rep. Reuven Carlyle, D-Seattle.
But Sen. Andy Hill, R-Redmond and chief GOP budget writer, argued that the new revenue projection weakens Democrats’ case for raising taxes.
“At some point you have to say, ‘Holy cow, we have a lot of money,’ ” said Hill. “We should be able to get this job done very quickly.”
Apparently among those in the “holy cow” camp are GOP Sens. Doug Ericksen of Ferndale, Michael Baumgartner of Spokane and Mike Padden of Spokane Valley. In a news release, the three proposed using $200 million of the projected revenue to cut state business-and-occupation taxes.
“There will be pressure in Olympia to spend all of this new increase in tax dollars, and we must resist that temptation,” Ericksen said.
During the special session, Hill, Hunter and other negotiators have spent time together in budget briefings and exchanging proposals that the other side has rejected as insufficient.
Lawmakers this year are struggling to meet a state Supreme Court order to better fund K-12 education, and other court orders to improve mental-health services, as well as provide cost-of-living raises for teachers and state workers, who have gone six years without such an adjustment.
Republicans have demanded that House Democrats pass their proposed $1.5 billion tax increase — to help fund the House’s $38.8 billion budget plan — to prove that they have the votes for it.
That plan includes a capital-gains tax and an increase in part of the business-and-occupation tax. The proposal also would collect sales taxes on bottled water and some online purchases, and end certain tax exemptions that benefit oil refineries.
Meanwhile, Democrats have criticized the Republican Senate’s $37.8 billion budget proposal for including gimmicks and budget shifts that would lead to cuts in government programs.
House Majority Leader Rep. Pat Sullivan, D-Covington, said in a news release that the revenue forecast isn’t enough to fix the state’s funding needs.
“While this forecast certainly helps, it does not completely cover needed resources to create a sustainable budget that funds education, protects the safety net, and bolsters an economy that works for all,” Sullivan said.
The state needs to have a new budget by July 1, the start of the fiscal year. The state Office of Financial Management already has directed some state agencies to update contingency plans in the event that doesn’t happen and there’s a partial government shutdown.