Stokesbary: House Democrats’ operating budget, which relies on $15B in new taxes, would wreck Washington’s economy
Speaking against the House Democrats’ record-breaking operating budget proposal, which relies on a staggering $15 billion in new taxes, House Republican Leader Drew Stokesbary warned that it would cripple Washington’s economy, burden working families, and drive businesses out of the state. He criticized the proposal for relying on unrealistic revenue projections, overspending, and short-sighted policies that fail to address the root causes of the state’s financial challenges. Stokesbary urged lawmakers to reject the budget and instead craft a responsible plan that prioritizes fiscal stability and protects Washington taxpayers.
Governor Bob Ferguson has since come out and said he would not sign the budget proposal (or the Senate’s version) as passed due to its overreliance on tax increases.
Full remarks:
I’m asking you to vote no on this budget, Madam Speaker. This budget is the wrong direction for Washington state. It harms average, everyday, working Washingtonians. The underlying budget we are facing a shortfall of, depending on who you ask, depending on what time of day it is, perhaps $5 billion, perhaps $15 billion. It’s a little disturbing that it’s hard to get the most accurate number, but as a lawyer whose answer to questions is usually, “Well, it depends,” I can understand that there’s a range. But we’re facing a deep shortfall.
How did we get to the shortfall that we have to solve with the budget before us? Well, a couple of ways, Madam Speaker. First, we have consistently spent more money than revenue has been coming in. Second, we have relied on unrealistic revenue assumptions that we have known not to be the case. Third, we have passed costly policies but delayed paying for them. And fourth, we’ve been spending one-time money for ongoing programs. Those are most of the reasons why we now have a budget before us with a $5-15 billion dollar structural deficit.
Well, Madam Speaker, I wish that we were solving all those problems, we were learning from our mistakes and not repeating them, but we haven’t done that with the budget before us. The budget before us repeats those mistakes. In the ‘25-‘27 biennium, this budget will spend more money than resources it brings in. This budget assumes in years three and four a 4.5 percent revenue growth factor that our state’s economist—one of the best in the country at his job—says we cannot expect or depend on. This budget assumes it and relies on it anyway. We are repeating that mistake.
We have once again postponed costly policies rather than figure out ways to pay for them now or reform them so we can pay for them eventually. We have simply kicked the can down the road, which we’ve done before that has put us in this problem, and we’re now doing it again. We have spent vast amounts of money, one-time money, on ongoing programs. This budget does that again.
We have failed to find, year after year, opportunities to save taxpayer dollars. I am incredibly grateful that for the first time in what is now my 11th session on this floor, we had budget writers who were willing to seriously look at savings opportunities. And I’m deeply grateful to the gentleman from the 3rd and his team for finally doing that. It’s been something I’ve been asking for for years, and there’s a number of items in this budget that are the result of policies that I’ve been advocating for for years.
The fact that we are bringing Evergreen State College’s budget allocation in line with the per-student average of all the other regional four years just makes sense. The fact that we’re assuming a pension rate of return that is commensurate with the historical rate of return that the State Investment Board has consistently generated, it just makes sense. These are things we should have done years ago, and I’m glad we’re doing them today.
But despite us finally doing all these good things and finally taking one small step towards getting our fiscal house in order, the budget does all kinds of other things that undoes all that. It’s one step forward and two steps back. All of the problems I just outlined that got us to this point we’re at today, we are repeating. And in addition to repeating those problems, we are spending more money than we need to spend. Revenue is growing at 4% a year; this budget increases spending at 8% a biennium. We don’t need to do that. We are going to be right back here.
And lastly, Madam Speaker, and perhaps most troubling, is how this budget is balanced. As you well know, our state law requires our budget to balance. In order for the budget before us to balance, it assumes new revenue. And while that new revenue is not in this budget, by passing this budget off the floor today, we are now obligating this chamber to have to come up with $15 billion of new taxes before we sine die in about four weeks. Otherwise, our budget will be illegal.
And the taxes that this budget and the accompanying documents rely upon will tax jobs out of Washington state. We have been incredibly blessed in this state to have companies like Microsoft and Amazon and Boeing call Seattle and the Evergreen State home. If we continue down this road, those companies will no longer want to call Washington home. They will no longer want to bring their jobs to this state. The Amazon.com and the Microsoft of the 2030s and the 2040s will not choose to make Washington their home. We will tax the jobs out of Washington.
Many speak of the budget before us; we heard about some of the wonderful things it does. We should recognize what a great state we live in. We are not Mississippi or Alabama; we are Washington state. We have the most generous financial aid package of any state in the country. We have among the highest per-pupil funding of any state in the country. We have among the most expansive Medicaid, both in terms of who’s covered and what services are covered, of any state in the country.
We should take the W, Madam Speaker. We are able to fund all of these things because we have created a business climate that allows companies like Amazon and Microsoft to come here and succeed. But with the revenue that is necessary to balance this budget, that will no longer be the case, and we will be here in 10 years or 20 years wondering where all the jobs went, where all the tax revenue went, and why we can no longer afford to continue to be the nation’s leader in higher ed funding and K-12 funding and health care funding and housing funding. And it will be because this budget represents a turning point.
We don’t have to raise taxes by $15 billion. Even if everything in this budget were good and necessary and correct, it only requires a $5 billion dollar tax increase, not a $15 billion dollar tax increase. This budget has a $3.5 billion ending fund balance, and far be it from me, a fiscal conservative, to say we should skate by on less, but every budget I’ve seen pass off this floor for the last 10 years, has had a $100 million dollar ending fund balance, and I’ve been assured that that is plenty. This ending fund balance is 35 times more money than we have needed before. We’re extracting $3.5 billion from the private sector simply to have a bigger ending fund balance than we need.
This budget assumes funding for a pension restatement bill. Where does the excess assets in that pension go? To a side account that is not reflected in the general fund that is part of this budget. That’s another $3.5 billion dollars. As was noted in an earlier amendment, this budget pre-pays $2.25 billion in low-interest bonds that are not due yet. Why? Why are we paying $2 billion in bonds when we have people that need help? Why are we cutting postpartum Medicaid coverage in half for new mothers to save $11 million when we have $2.25 billion to pay off loans that aren’t even due yet? Why are we doing this, Madam Speaker? We are going to wreck the economy in Washington state by raising taxes for $15 billion. We are raising taxes far more than is necessary, even to finance the new, unnecessary spending in the budget. We are raising taxes $10 billion more than is needed at the time we are raising fees on people who want to enjoy Washington’s outdoors, at the time we are cutting Medicaid coverage for postpartum mothers. I have a hard time understanding how it makes sense, Madam Speaker.
We have a problem that we need to solve in this budget. I’ve outlined some of the ways we got here. Unfortunately, despite knowing the house is on fire, this budget does not do anything to put out the fire or stop a new fire from happening. It simply fans the flames. This budget is repeating the mistakes of the past. We should be learning from our mistakes, not repeating them. This budget makes cuts that are unnecessary that will hurt people that we don’t have to make. This budget increases costs on the middle class. It passes health care costs on the middle class. It relies on a property tax increase that will hit the middle class. This budget will rely on massive, unnecessary tax increases that will tax the jobs out of Washington. And seemingly uncontent with that damage, this budget will tax the joy out of being a Washingtonian as well.
I wish I could vote for this. I wish we could fix this. It wouldn’t take that much more work, but there are so many things that still remain wrong that we have to vote no on this budget, Madam Speaker. We need to be learning from our mistakes, not repeating them. We cannot be passing these unnecessary tax increases at this point in time. We need to understand how to take the win. We have funded so much in this state thanks to the economy that we built here, and this single budget will take one giant leap towards undoing all of that great work and making it so much harder to do any other good work in the future.
Let’s put this bill down, Madam Speaker, go back to the drawing board, and come up with a budget that works for Washington, works for Washington’s economy, and works for Washington’s families. This is not it, so please vote no.
