No capital gains, B&O tax increase in new state budget
Just barely avoiding a government shutdown, the Legislature on June 30 passed the $44 billion 2017-2019 state operating budget.
While the budget would increase revenues by about $2 billion – to comply with the Supreme Court’s McCleary decision requiring greater spending on K-12 education – it does so without the new capital gains tax and 20% B&O tax increase previously promoted by the Governor and House leaders and strongly opposed by AGC. The budget puts about $2 billion of new money into K-12 schools over the next two years, $7.3 billion over four years.
Most of the new revenue is achieved by an increase in the state’s property tax, which would go up by about 81 cents per $1,000 of assessed property value. At the same time, the plan lowers local school-district property taxes. The combination means that most people will see an overall property tax decline, but those in areas with high property values – like Seattle, Bellevue and Mercer Island – would see their property taxes rise.
There are a few other smaller revenue-raising measures, such as new tax collections from certain online shoppers and a repeal of the sales-tax exemption on bottled water.
The budget also includes $300,000 for an AGC-backed matching grant program to fund skilled-worker outreach and recruitment efforts for industries, such as construction, that are facing a workforce shortage.
For details about the operating budget, click here.
Contact AGC Chief Lobbyist Jerry VanderWood at 360.352.5000 for more information.