By John Somerlott, Legislative Assistant, Greater Spokane Inc.
As the legislature officially adjourned on Sine Die, April 27, a busy session covering serious challenges was moved to the Governor’s hands. Although the Governor has already signed many bills into law, the fate of the most significant ones—namely, the budget and revenue proposals—remains undetermined.
The Legislature wasn’t the only one hard at work in Olympia; Greater Spokane Inc. and our partners were also there for the GSI Olympia Fly-In. We met with legislators, shared our regional priorities, and advocated for policies that support economic growth and competitiveness in the Spokane region. Our presence helps ensure that the Spokane region remains part of key conversations shaping Washington’s future.
For a deep discussion on the outcomes of the state legislative session, we are excited to host the Legislative Wrap-Up event on May 20. Our Olympia lobbyist, Jim Hedrick, will join state lawmakers from the Spokane region to discuss the session. May 20 will be especially significant, as it marks the Governor’s final day to take action on bills. This means we will have the most current and comprehensive updates and discussions available.
Prior to each legislative session, GSI and our partners develop the State Legislative Agenda. This document provides a guideline for our policy goals for each legislative session. While we don’t get everything we want in each legislative session, we are always working on what can be done next. This list is only a small snapshot of what happened during the legislative session: some things that we supported, some things that we opposed.
New Taxes
The state’s new revenue proposal raises taxes significantly, and other bills raise various costs associated with running a business. HB 2081 increases the B&O tax rates, and SB 5814 recategorizes many businesses to require them to charge sales and B&O taxes. Sales tax on services is perhaps one of the largest of these expansions. Each new revenue proposal will create immense challenges for existing and new businesses.
GSI believes introducing new taxes on businesses, especially amid ongoing uncertainty around tariffs, undermines their ability to continue operating. The most vulnerable small businesses will have their costs increase from suppliers, and have their own costs increase. Their only option will be to raise prices. There are calls for the governor to veto both bills, coming from multiple industries. It would be difficult to veto sections of either bill without the Governor subsequently needing to call a special legislative session to address the budget.
Employment
In this session, we protected the teachers’ compact from being repealed and promoted the respiratory care and cosmetology compacts. These interstate agreements play a vital role in expanding the pool of qualified professionals, which is especially important for communities that are home to military bases. Military spouses have higher unemployment and underemployment rates, and compacts help fix that problem.
Public Safety
From the outset of the session, the Governor made clear he wanted significant budget cuts before considering new taxes. He was explicit that there couldn’t be cuts to public safety or K-12 education. He also wanted a $100 million grant for law enforcement purposes. The legislature passed HB 2015, which creates a law enforcement grant that can fund a variety of law enforcement-related programs.
Housing
Washington passed a handful of changes to rules on construction requirements that are beneficial for the construction of new housing. HB 1096 and HB 1403 are two of those bills that make lot splitting condo construction much easier. GSI and our partners worked hard to get as much done in the affordable housing space as possible, you can read more on housing here.
One of the largest challenges going forward will be rent control requirements. The bill caps rent increases at 7% plus inflation, but not to exceed 10% total. The problem is that the little evidence behind rent controls working is mixed at best, but more likely causes overall prices to increase and housing stock to decrease.
Health Care
The most significant budget cuts are to higher education, the Department of Children, Youth, and Families (DCYF), and health care. SB 5083 imposes caps on state employee (PEBB and SEBB) health care reimbursement rates, which is just one example of legislative cuts to health care that carry significant cost implications for hospital operations.
Infrastructure
Transportation has good news and bad news. The good news, the North Spokane Corridor is funded through the end of 2029 and should be all but complete. The legislature seems to have made the NSC a high priority in the transportation budget. The NSC was advocated for fiercely by our delegation during the GSI Olympia Fly-In event, and we were heard.
The bad news, this comes with an increase in the gas tax. Gas and diesel will both have a 6-cent increase beginning in July. Diesel will go up another 6 cents over 2 years, and each tax has an additional 2% inflation addition year to year. SB 5801 also adds a litany of new taxes and fees around vehicles, from licensing to rental car taxes.
Energy
In addition to the gas tax, which will raise all costs, changes to carbon fuel program requirements are expected to further increase prices at the pump. Fortunately, HB 1912 provides agriculture cost reimbursements, and fuel use is protected from CCA as it was promised. HB 1543 also amends the clean building program to improve and expand pathways for compliance with the program.
Want to learn more about what happened this session and what it means for Spokane?
Join us at our upcoming Legislative Wrap-Up event on Monday, May 20 at the Spokane Club.
Click here to register.
