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Dear Friends,
Today marks day 47 of the 60-day 2010 legislative session. Next week, we head to the House floor to debate and vote on legislation, where we will spend the majority of our time for the remainder of session.
FLOOR SPEECH FROM LAST WEEK:
On February 19, we honored Japanese-American World War II veterans and internees from the state of Washington. I invite you to view my speech supporting the resolution on the House floor by visiting my web page.
AGRICULTURE TARGETED FOR TAXES:
I'm very concerned state leadership is looking at ways to balance part of the budget on the backs of farmers. The Senate budget proposes to eliminate the tax exemption on all fertilizers and sprays, except those certified as organic. That would be a $25 million hit to agriculture in the coming year, and a $59 million tax increase in the 2011-13 budget cycle. In addition, the governor proposed to triple the Model Toxics Control Act (MTCA) tax, increasing it to 2 percent. The state Department of Revenue estimates the tax will increase the cost of gas by 3 cents. This tax would be a three-way hit farmers through increased fuel, fertilizer, and pesticide costs. The results could devastating, especially to our agriculture community operating on a thin margin. Additionally, the governor's proposed budget calls for a suspension of the B&O tax exemption for livestock nutrient management (equipment and facilities).
I met with many farmers throughout the district over the past year – many of them are struggling during these difficult times. They cannot endure even more costs, regulations, fees or taxes right now. I'm extremely concerned that if we continue down this path we will see additional farmers go out of business. Just as concerning are the long-term consequences this is sure to have beyond the negative impact to our agricultural community now. Future generations interested in taking over these farms must be assured they can feed their family doing it – raising their costs to do business and will only hurt their viability during tough times.
BUDGETS RELEASED THIS WEEK IN HOUSE AND SENATE:
Senate and House budget proposals were released this week, and I remain frustrated with the methods being used to close this budget gap. It is disappointing to see the majority party is patching our $2.7 billion budget gap this year the same way it did last year – with one-time money including, fund transfers, skipping pension payments and billions in federal bailout dollars – which was clearly unsuccessful because we are back in the same predicament. The only difference this year is a reliance on substantial increases in taxes and fees on the people of Washington state at a time when many are struggling to pay their bills, keep their business open or find work. The governor, House of Representatives and Senate leadership are all offering combinations of large tax increases and modest cuts, so it is difficult to determine what the outcome will be.
The House Democrats' proposed supplemental operating budget would spend $30.678 billion, leaving just $269 million in reserves. It would address the state's $2.7 billion shortfall by using:
- $857 million in new taxes;
- $641 million in federal dollars;
- $653 million in state spending cuts;
- $236 million in state budget transfers; and,
- $311 million from state reserves.
The state had a $1.8 billion surplus in the 2005-07 budget cycle, driven by extraordinary real estate excise tax revenue. State spending grew 33 percent, or more than $8 billion, from 2005 to 2008. Rather than take care of our obligations, state leadership created new programs and expanded existing programs – making promises to the people of Washington despite clear warnings the money wouldn't be there to fund those promises.
Now we're being told “revenue solutions” (i.e. new taxes) are the only way to patch our deficit. I will continue to advocate for a priorities of government model, and offer sustainable solutions to those issues we need to take care of as a state: the education of our children, public safety, programs that protect the most vulnerable in our communities, and critical infrastructure. We cannot continue down this path of spending beyond our limits in good times, and then going back to the taxpayers for more when we run out of their money. This budget proposal will put us back in the same difficult position again next year.
If we want to get serious about funding our true priorities, right now is our opportunity to change the way we do business. We cannot keep doing the same things over and over and expect any different results.
It is an honor to serve as your state representative here in Olympia. I look forward to your continued input on the issues you care about.
Warm regards.
Warm Regards,
Norma Smith
