Washington Legislative Week in Review

Special Session. State lawmakers adjourned their 105-day session at 4:07 p.m. on Friday (two days early); but they will be back at work soon, as Governor Chris Gregoire has announced that a special session begins Tuesday, April 26 (today). The special session is necessary to pass the budget, bills necessary to implement the budget, and workers’ compensation legislation. The Legislature must address 40-60 bills, many of which deal with tough policy issues. The special session will last for 30 days, unless the Legislature is able to conclude its business before that time. If not, additional 30-day special sessions may be called. Each day of a special session will cost taxpayers up to $16,000, which should motivate legislators to quickly come to an agreement on the budget—especially at a time when state resources are scarce.

Prize-Linked Savings Accounts. Senate Bill 5232 was delivered to the Governor for her signature on Friday, April 22. The bill will allow financial institutions to participate in prize-linked savings promotions, which incent consumer savings by entering participants into drawings for cash prizes.

The Governor has 20 days, excluding Sundays, to sign the bill, since the Legislature adjourned on Friday. Any bill not signed or vetoed by the Governor within that 20-day period becomes law without her signature.

First Mortgage Income Tax Exemption Repeal. House Bill 2078 received a hearing before the House Ways & Means Committee on Thursday, April 21. The bill declares the intent of the Legislature to fully fund K-12 class size reductions by capping the B&O tax deduction for interest earned on first mortgages and deeds of trust on residential properties to $100 million per year, per taxpayer. The bill also eliminates the nonresident sales tax exemption. The Washington Bankers Association testified in opposition to the bill arguing that having banks pay taxes on first mortgages would have a negative effect on consumers purchasing first-time homes. The banks also took the opportunity to criticize credit unions for not paying their fair share of taxes and therefore creating an unlevel playing field.

Tax Preference Review. The Senate concurred with House amendments to S.B. 5044 on Thursday, April 21, by a vote of 31-17 with one excused. State law already requires a periodic review of tax preferences to determine if their continued existence or modification serves the public interest. Tax preferences are reviewed in the order they were passed into law, and are reviewed by the Citizen Commission for Performance Measurement of Tax Preferences. S.B. 5044 gives the Commission additional flexibility in scheduling tax preference reviews and allowing tax preferences to be scheduled for an expedited (light) review. Finally, the bill requires that tax preferences that are enacted for economic development purposes must demonstrate growth in full-time family wage jobs with health and retirement benefits.

Posted in Advocacy News.