(The Center Square) – The Washington State House of Representatives approved three tax bills after midnight on Tuesday morning as part of a revenue-generating package to deal with a projected $16 billion operating budget shortfall over the next four years.
Engrossed House Substitute Bill 2049 would have allowed an increase in the growth factor from the current 1% property tax cap to as much as 3%. However, Rep. Steve Bergquist, D-Renton, the bill’s sponsor, added an amendment removing the bill’s sections on the growth limit.
Opposition from Gov. Bob Ferguson and Washingtonians – at one point, more than 43,000 people signed in against a similar Senate bill at a public hearing – led Democratic leaders in both chambers to abandon the bill in its original form.
The bill’s major focus now is education funding and revised guidelines for districts seeking to collect revenue from voter-approved local levies.
Prior to Tuesday morning’s vote, Republicans warned the bill would still allow an increase in the school levy cap.
Substitute House Bill 2077 appears to target electric vehicle company Tesla. The bill creates a new tax on zero-emission vehicles, a 10% tax on banked credits and up to a 50% tax on pooled credits.
Engrossed Substitute House Bill 2081 would adjust business and occupation tax rates and introduce new surcharges. The bill targets larger businesses and financial institutions with increased tax rates and surcharges. It also includes a new, temporary surcharge on businesses earning more than $250 million annually.
Rep. Sharon Wylie, D-Vancouver, defended the bills.
“Overall, they were packages that I could fully support, and I voted for them,” she told The Center Square on Tuesday afternoon. “I think a lot of the disputes over these are due to partisanship and chafing at being in the minority.”
Time is a factor, she admitted.
“We need to get these things moving as we’re under very strict deadlines,” Wylie noted. “For the last several years, we have ended on time and adjourned, and we don’t want to end up in special session.”
The 105-day session is scheduled to end on Sunday, April 27.
Rep. Ed Orcutt, R-Kalama, is the ranking member of the House Finance Committee. He has been critical of Democrats for passing the three tax hike bills.
“Unfortunately, these bills are part of a larger tax package that will fund more reckless state spending from the majority party,” he said in a Tuesday morning news release. “At a time when state lawmakers should be right-sizing government, something Governor Ferguson has also called for, Democrats want to double down on the failed fiscal policies that got us into the budget shortfall we have today. The reality is this: The Legislature does not need to raise taxes on any person or employer in our state.”
Jason Mercier, vice president and director of research at the Mountain States Policy Center think tank, humorously questioned the bills’ late-night passage.
“Things that happen after midnight: carriages turn back into pumpkins, vampires come out, and Washington lawmakers pass massive tax increases,” he wrote on X.
Carleen Johnson contributed to this story.
