A leaner capital gains tax, a second GOP budget and a $5 fine

2021 Washington Legislature, Day 38 of 105

Everett Herald political reporter Jerry Cornfield: jcornfield@heraldnet.com | @dospueblos

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OLYMPIA, Feb. 17, 2021 — Good morning.

We’ve made it a third of the way through session.

Senate Democrats are once again whittling away at Gov. Jay Inslee’s agenda. In recent days, they halved his proposed tax to fund public health. They are allowing the continued use of credit scores to set insurance rates — although only to lower them, not raise them — a practice he wanted to end.

And Tuesday, they overhauled his signature capital gains tax proposal to make it apply to fewer people and bring in less money. Inslee said he had not seen it and could not comment.

House Speaker Laurie Jinkins of Tacoma sounded like her caucus could live with the changes if and when it comes over.

“Capital gains is something we’ve wanted a long time. I actually think we may very well be OK with it,” she told reporters. “I’m also confident the courts will uphold it.”

Money matters

House Republicans hauled out a detailed blueprint for a new two-year budget Tuesday, days after their Senate counterparts put forth their approach for spending.

Rep. Drew Stokesbary of Auburn, lead writer of the House offering, said it contained no new taxes and no cuts to critical services. It is a deep dive. Among its interesting pieces are funding for a working families tax credit, money for schools to resume in-person learning, a sales tax exemption for diapers, a merging of state pension plans and several billion dollars in reduced agency spending.

Stokesbary said it is intended to be more than a conversation starter, noting he came to Olympia “to make better laws, not just better suggestions.”

Majority Democrats in the House and Senate are keeping their powder dry. They will put out budgets following a March revenue forecast.

Writing them will be “more complicated in a welcome way” if, as expected, the state receives another injection of federal COVID relief from Congress. Democratic budget writers would do all they can to meld the funds into the broader spending approach, Jinkins said.

But if federal dollars arrive too late in session, she said, they could pass a budget and “call ourselves back into special session” later to make decisions on how to distribute the money. Republicans will certainly be asking if it comes to that.

Prepare to pay

Democratic Lt. Gov. Denny Heck is president of the Senate, but on occasion he’s referred to the chamber as the House. It’s not a surprising slip of the tongue given that he spent the prior decade in the U.S. House of Representatives.

He told senators Tuesday he’s been made “painfully aware” of the verbal miscue. He announced he’ll put $5 in a jar for each mess-up going forward. And any senator who makes the same mistake can plan on paying up, too. At the end of session, Heck said, all the money in the jar will go to charity.

“Let’s hope we can make a difference in people’s lives based on your mistakes, not mine,” he said.

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