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Dear Friends and Neighbors,
There’s been a lot of news from the Legislature since my last update to you in September. We’ve had another special session – the third this year, a new revenue forecast is out for the state, and discussions are continuing over a possible transportation revenue package that could include an increase in the state gas tax as high as 11.5 cents a gallon. I’d like to take a few moments to provide an update.
Discussions continue on transportation
In my last update, I told you of a series of public transportation “feedback forums” being held throughout the state by Senate Transportation Committee Co-chairs Sen. Curtis King, R-Yakima, and Sen. Tracey Eide, D-Federal Way, including one Sept. 26 in Pasco. The purpose of the forums was to determine interest in a proposal to raise the state gas tax to pay for new transportation projects in Washington. In June, I voted against House Bill 1954, a measure sponsored by House Democrats and supported by Gov. Jay Inslee which would have increased the state gas tax by 10.5 cents a gallon. The measure included just the tax increase, but no cost-saving reforms or accountability measures.
Some of the cost-saving reforms and accountability measures that have been proposed include:
- Making sure existing transportation taxes and fees go for transportation projects in Washington and are not diverted to the general fund for other purposes;
- Streamlining the permitting process to keep costs down and get vital transportation projects completed on time and within budget;
- Determine why it costs more to build highways, bridges and ferries in Washington than other states – and then work to reduce those costs;
- Ensure accountability for tax dollars by requiring WSDOT to report major engineering errors to the state Legislature;
- Limit bond terms to 15 years, which would save taxpayers thousands of dollars in interest payments; and
- Identify and fund specific projects that fix chokepoints, expand highway capacity, reduce traffic congestion, repair and maintain existing facilities.
You can read more details about these proposals here. A few of my House Republican colleagues recently issued a video that gives a good overview of our proposed transportation solutions in Washington. I invite you to view it here.
Following the Senate transportation feedback forums, a proposal emerged Nov. 11 that would raise the state gas tax to 11.5 cents a gallon.
We want your views! Take our Transportation Survey
Since my seatmate, Rep. Maureen Walsh, and I are hearing many different views about the transportation revenue package from lobbyists, colleagues in both the House and Senate, and other interest groups, we feel it is very important to hear from you – the citizens of the 16th District. We’ve created a short survey on this issue and I invite you to provide your input.
Click here to take our Transportation Survey
Legislature provides tax incentives to aerospace industry during three-day special session
Earlier this month, Gov. Inslee called the Legislature back to Olympia for a special session to pass legislation aimed at keeping jobs and production of Boeing’s 777X in Washington state. During the three-day special session that ended Nov. 9, the Legislature passed two bills.
House Bill 2088 would appropriate $8 million from the state’s General Fund to expand aerospace workforce training at community and technical colleges in Washington, $500,000 to develop a fabrication composite wing training program at Paine Field in Everett, and $2 million to make grants to local governments to help pay environmental permitting costs related to construction of Boeing’s new 777X facility. The measure passed the House 77-9 and the Senate with a unanimous vote. I voted “yes.”
Senate Bill 5952 would extend a business and occupation (B&O) tax incentive for the aerospace industry from the current 2024 to the year 2040 to entice Boeing to construct its new 777X jet and carbon fiber wings in Washington. As the ranking member of the House Finance Committee, I helped to explain this legislation to my colleagues and move the measure to the House floor for a vote. The bill passed the House 75-11 and the Senate 42-2. It would provide about $9 billion in tax relief for the aerospace industry, including all businesses, large and small, that supply Boeing and the aerospace industry. The tax incentives would apply over the next 27 years if the 777X is constructed exclusively in Washington and construction begins by 2017. If the jet is constructed elsewhere, the tax relief extension is rescinded.
The week after the Legislature approved these incentive bills, the International Association of Machinists and Aerospace Workers (IAM) voted 67 percent to reject a new contract with Boeing. Now the aerospace giant says it will entertain offers from other states and make a final decision within the next two to three months of where it will build the 777X.
We need to help all sectors of our economy
In my speech on the House floor, I noted that the Boeing tax incentive legislation needs to be a part of a larger discussion about expanding similar tax relief to other employers in our economy. Listen to my floor speech here. When the Legislature meets for its scheduled 60-day regular session, beginning Jan. 13, we need to move forward on proposals that would lower workers’ compensation costs, improve permitting, reduce unnecessary and burdensome regulations against employers, and lessen the tax burden. That’s the way to get Washington working again.
Revenue forecast reflects state’s economy
I serve as a voting member of the Washington State Economic and Revenue Forecast Council. The council releases quarterly reports that project incoming state revenue. Its latest report was released last Wednesday, Nov. 20. The report shows an increase of $16 million for the current budget cycle (2013-15) and an increase of $9 million for the 2011-13 biennium. However, officials are predicting a decrease in revenue of nearly $44 million for the 2015-17 budget cycle.
I noted in a statement released to the press that “This latest forecast shows us the state’s economy is continuing to improve, but recovery remains slow. While the immediate forecast is good news, it also underscores the fact our economy remains in a very precarious position.”
We still have a fragile economy. So that is why it will be so important for the Legislature to focus on job creation during the 2014 session and avoid taking any actions that would destabilize our economy and send it into negative territory.
Listen to my radio release here.
Transportation – Another special session?
When Gov. Inslee called the special session earlier this month to keep the 777X production in Washington, he also wanted lawmakers to use that time to reach agreement and pass a transportation revenue package. Earlier this year, we spent six months in Olympia in a regular session and two extended sessions – and in that time, no one was able to reach agreement on the issue of additional revenue for transportation. We did pass a 2013-15 transportation budget in April of $8.8 billion. Of that amount, $5.2 billion was appropriated for transportation projects. However, if an agreement could not be reached in six months, we knew it was improbable in three days. Still, the governor was hopeful there might be a transportation revenue package ready to vote on during the Legislature’s committee assembly days, Nov. 22 and 23. While the Senate held a work session last week on its transportation revenue proposal, there was no vote.
Discussions now continue as we enter the holiday season. Inslee is insistent upon passing an increase in the state gas tax. Will he call a special session between now and January when the regular session is scheduled? That’s the question on many people’s minds. From my standpoint, I’m willing to keep an open mind on discussions of future transportation revenue because I know how important local projects will be for our economy and quality of life. However, I believe those discussions must include enacting cost-saving reforms and accountability measures, including those I’ve listed above in this update.
Bipartisan effort on the basketball court
While we may spar in the Legislature and have different views, it was my honor to be asked to play on Gov. Inslee’s basketball team during KIRO Radio’s “Clash on the Court” charity game Nov. 6 in Shoreline. You can read the highlights here. KIRO’s Dave Ross and 710 ESPN Seattle’s Dave Grosby did the play-by-play, including describing my actions on the court. You can listen to excerpts of that broadcast here. We played against a team led by KIRO’s Dori Monson and we won, 58-57.
Happy thanksgiving, everyone!
Sincerely,
Terry Nealey
