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Dear Friends,

It is hard to believe June is here. I want to provide you an update on the Skagit River Bridge situation, the special session in Olympia and give you more detail on the tax plan being proposed by the House majority.

Skagit River Bridge

First, I am grateful that no one was seriously injured and no lives were lost in Skagit River Bridge collapse. Our first responders did an outstanding job, and many from various entities have worked tirelessly to provide temporary solutions while full service is restored. Federal response has been swift to date, and I’m hopeful that will continue. Currently the timeline to have a temporary bridge in place by mid-June and a permanent span in by mid-September. I am providing a couple links with information that are being updated as things progress.

This event should not be used to advocate for or against a state gas tax revenue package. If anything, this should prompt us to look at past use of transportation tax dollars, especially the prioritization of maintenance – and to use lessons learned to move reforms that will maximize future investments. Also, we need to ensure we are providing proper oversight of our roadways. In case you missed it, read the statement issued by Sen. Barbara Bailey, Rep. Dave Hayes and I: 10th District legislators on I-5 Skagit River bridge collapse.

Taxing Main Street businesses

Are you on the list?House Democrats are still insisting on raising taxes, even though the state is expected to take in an additional $2 billion in the coming budget cycle in tax revenues. Recently, House Republicans received a complete list of the businesses, our job creators, who would be impacted by the business and occupation tax surcharge, House Bill 2038. I believe you will be stunned to see how hard-working, middle class folks are impacted. Are you on the list? Click the “Are you on the list?” photo to find out.

You can see how widespread this tax increase is and that it truly hits our Main Street small business people. Outside of King and Snohomish Counties our economy remains fragile. Click here to look at the latest unemployment figures for each county. The Washington Food Industry Association recently shared what this tax would do to trade and trucking and how that impacts the food industry. I am providing this illustration because it tells an important story about the potential impact of this proposal. Then consider it multiplied hundreds of times throughout our economy. Below is the action alert they sent out and an example of the fees they would pay in relation to other states:

Action Alert from Washington Food Industry Association

SHB 2038: Washington State’s budget can be balanced without putting a greater tax burden on trade and trucking which leads to an increased cost of food for Washington citizens who are still struggling as we come out of this recession.

Unlike other states, Washington taxes businesses on their income before expenses, so the tax may lead our trade partners and interstate haulers who don’t need to come to our state to avoid doing business here, diverting trade to other states and countries.

Since trucking and interstate hauling is an important part of the food industry in Washington, our suppliers, our grocers and eventually our customers who will see an increase in food costs will be harmed as a result of this tax.

Just take a look at some of the fees that our food supplier members would have to pay under this tax:

* A small trucking company (10 trucks) that derives $2 million in gross revenue from interstate hauling would pay $38,520 in taxes under the new proposal. In Oregon and California that same business would pay only $6,320 and $6,720 respectively because they are taxed on net income rather than gross revenues.

* A large trucking company (100 trucks) that makes $20 million in gross revenues from interstate hauls would pay $385,200 in taxes to Washington State while only paying $63,200 in Oregon and $67,200 in California for the same business.

Special session update

It is day 22 of the 30-day special session and we are still waiting for an operating budget agreement. Again, the primary reason we are in a special session is that the governor and House majority want to spend nearly $1 billion more than the state plans to take in for tax collections. Keep in mind, we are already expecting a 6.6 percent increase in tax collections, or an additional $2 billion.

Budget negotiators continue to meet but there has been little action. In fact, the only time the full House has been in Olympia since the start of the special session was last Thursday, May 30, to vote on one bill which I opposed as passed.  It was a bill to reinstate the estate tax on married couples’ assets in response to a Washington State Supreme Court ruling. House Bill 2064 contains a retroactivity clause requiring 65 families, who have deceased family members, to pay about $138 million in taxes to the state Department of Revenue. I expect the bill to be challenged on its constitutionality. It is a little ironic that we were called back for one vote and two hours of deliberation in caucus and floor time at taxpayer expense, and the one bill we pass is another tax so the majority will have more revenue to negotiate their proposed budget.

It is important to remember that both budget proposals currently on the table respond responsibly to the Washington State Supreme Court McCleary decision, both investing at least $1 billion more in education. But there is a dramatic difference philosophically in approach, one demanding that government live within its means, and the other fueled by more and more taxes.

During the interim following session, in addition to the policy and committee work that is ongoing, I am available to meet to discuss your concerns, to speak with your group, or visit your class. These shared experiences are important and inform my work as your representative. Hopefully they will be of benefit to you as well. Please call my office if you would like to schedule a time.

I hope you find this update informative. Please feel free to pass along to those who may be interested. Have a lovely day.

Warm Regards,

Norma Smith

State Representative Norma Smith, 10th Legislative District
435 John L. O'Brien Building | P.O. Box 40600 | Olympia, WA 98504-0600
(360) 786-7884 | Toll-free: (800) 562-6000