The recently completed legislative session will be remembered for missed opportunities for tax relief that could have benefited businesses and working families.
While the supplemental budget approved during the 2022 legislative session contains no across-the-board tax increases, that’s not much for lawmakers to brag about, considering the staggering $14 billion revenue surplus the Legislature had to work with.
Instead of providing broad tax relief, as other states have done for businesses and residents, lawmakers went on a spending spree, adding $5 billion to the current biennial budget, bringing it to $64.1 billion.
As Kris Johnson, of Association of Washington Business, points out, that’s a 9% increase in a supplemental year, which is usually reserved for modest tweaks to the budget. Together with last year’s budget, which included over a dozen new taxes, it makes the current biennial budget 24% higher than in the previous biennium and marks a 50% increase in the state budget since 2017.
The Legislature also passed a $17 billion, 16-year transportation bill that funds few new Eastern Washington highway projects. The largest Spokane area projects include $50 million for Division Street bus rapid transit and $150 million for Palouse River & Coulee City Railroad line rehabilitation. It also expedites previously committed funding for the North Spokane Corridor project, shaving two years off the construction timeline.
While some lawmakers claim the transportation package doesn’t raise gas taxes, AWB says the bill includes $2.5 billion in new and higher fees.
Jake Mayson, Greater Spokane Incorporated’s director of public policy, says the state’s spending rate is unsustainable.
“The state revenue is outpacing personal income of citizens,” Mayson says. “It’s taking larger portions of purchasing power every year.”
GSI and other business advocacy organizations were on defense much of the session and count some victories in potential economically harmful bills that were thwarted.
Those measures included proposed modifications to energy codes that would have made it difficult to incorporate natural gas in construction, a measure that would have allowed the Department of Labor & Industry to increase regulations on ergonomics, and a bill that aimed to mandate that private landowners manage riparian zones.
In another missed opportunity, the Legislature punted the WA Cares long-term care insurance program until after the next election, but failed to rescind the flawed legislation that simply doesn’t provide significant benefits at sustainable costs.
Lawmakers did approve a reduction in unemployment insurance social tax rates that the state Employment Security Department says will provide immediate tax relief to employers.
Mayson says that’s helpful but not substantial, given that unemployment insurance premiums are considerably more expensive than before the COVID-19 outbreak, largely due to the governor’s pandemic-related mandates that led to widespread layoffs.
“The Legislature had the resources to completely fix (premium hikes), but chose not to,” Mayson says.
Thousands of businesses that haven’t recovered from the pandemic-induced lockdowns and subsequent restrictions are now facing inflationary pressures on top of new taxes enacted by the Legislature last year.
“A lot of taxes just hit,” Mayson says. “Where is the relief that we can reinvest in the community and reinvest in creating jobs?”
That’s among the missed opportunities that the 2022 legislative session will be remembered for.
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