WA Dems: No wealth tax, no raiding rainy day fund in ongoing budget plans

(The Center Square) – Majority Democrats in both chambers of the Washington State Legislature say a “wealth tax” proposal is dead this session.

During a Wednesday media availability event, Senate Majority Leader Jamie Pedersen, D-Seattle, and House Majority Leader Joe Fitzgibbon, D-West Seattle, each said current versions of the operating budget still being negotiated do not include a wealth tax.

Those remarks follow comments made last week by Democratic Governor Bob Ferguson, who said he would veto any budget that includes a wealth tax.

Ferguson told reporters that Democratic proposals had “far too much in taxes” and a wealth tax could not be included, as it has not been tested in the courts.

Democrats previously made a wealth tax targeting those with more than $50 million a cornerstone of their respective revenue packages to balance the next state budget. The idea was to tax $10 on every $1,000 of the assessed value of certain assets such as stocks, bonds, and mutual funds.

“It’s very likely that no part of our budget will be based on a wealth tax,” Pedersen said.

Fitzgibbon said many of his constituents and fellow Democrats still support the idea of a wealth tax, but conceded it is no longer in consideration this session.

“There’s definitely some disappointment among many of our members that that particular tool is not going to be part of our budget solution this year,” he admitted.

Pedersen and Fitzgibbon were also asked about proposals to raid the state’s budget reserves, or rainy day fund, to help close the budget shortfall of up to $16 billion. Ferguson has said he does not support tapping the reserves.

Senate Democrats’ proposal would have drained $1.6 billion from the account, leaving just tens of millions in the fund.

“We will not be tapping the rainy day fund,” said Pedersen.

Fitzgibbon was slow to respond to the same question.

“Um, there may be a little bit of nuance to that from my perspective,” he said. “We’re planning to balance the budget in other ways.”

During a Wednesday morning press conference, Senate Republicans pushed back on a proposed property tax hike. They told The Center Square that the current budgeting process, controlled by Democrats, has left them out of negotiations.

“We argued against going into conference because, as anyone familiar with the process and what that means knows is that we designate three people – two from the majority and one from the minority – in each chamber to go in and negotiate a budget,” Braun explained. “But, what really ends up happening is the two Democrats from the majority in the Senate and the two Democrats from the House, they go and negotiate the budget and nobody hears about it for a couple of weeks until it comes out. They claimed this will be very transparent, but I can tell you we’re on day seven of ‘transparency,’ and I don’t think a single one of us has heard a word about where budget negotiations are.”

Asked about the contention Republicans are being left out of negotiations, Pedersen pushed back.

“The last time in 2017 when Republicans were in charge of the Senate, we had a bill slapped on us with no notice and we voted on it the same day,” Pedersen said. “When we took the majority, we changed the rules to require more transparency. We require the budget bill and all conference bills to sit on the bar for at least 24 hours before they are voted on.”

Pedersen said the conference rules for budgeting have been in place for a long while.

“Ultimately, to get a conference report on which you could have an up or down vote, you have to get agreement from four members of the conference committee,” he said.

With two Democrats on each of the conference committees, the majority could find agreement without any Republican support.

“We’ve seen a better way where you do it in the public, and you exchange positions, and things are negotiated, and people have a chance to weigh in,” Braun said. “When whatever they decide in private in that back room comes to light, there’s no opportunity for any legislator on either side of the aisle to offer an amendment. It’s simply an up or down vote and that’s what they want. They want to negotiate in secret and bring forth a budget that they like … and put up a yes or no and go home without any additional scrutiny.”

Pedersen and Fitzgibbon said they expect their respective chambers’ budgets to be public within a week.