Olympia Lawmakers Return for 2017 Session

Washington State legislators will convene today in Olympia for the 2017 legislative session. The regular session is scheduled to run 105 days through April 23, however special session extensions are likely.

Like all odd-year sessions, the focus this year will be on crafting, negotiating and adopting the 2017-19 biennium operating, transportation and capital budgets.Additionally, funding K-12 basic education in the operating budget to meet the Washington State Supreme Court's McCleary decision requirements will be a major challenge. It is highly likely that the legislators’ work this year will require one (or more) 30-day special session.

Below is a summary of recent legislative and regulatory activities in Washington State as well as a preview of the 2017 session.

Please note hearings this week include discussion of unmanned aircraft and biometrics. Additionally, included for review is draft language which would modify penalties for distracted driving.

Distracted Driving Legislation

Last week, the Seattle Times published an article regarding a legislative push on distracted driving. From the sounds of the article, Washington State legislators are interested in a few components: increased fines, reporting citations to courts and insurance companies, funding for publicity campaigns around distracted driving and changes to the criminal code.The draft languageis here for review.

Also last week, the New York Times published "Can a Law Stop Distracted Driving? California Hopes to Find Out". Federal data is scheduled to be released that suggests more than 3,400 people were killed in accidents that involved at least one distracted driver in 2015.

Legislative Changes

In addition to the new wave of legislators on account of the election, several additional membership changes have occurred in the Legislature. Dino Rossi (R) was appointed to fill the 45^th Legislative District seat left vacant by the passing of Senator Andy Hill. Rebecca Saldaña (D) was appointed to fill the 37th District vacancy when Senator Pramila Jayapal left to assume her congressional seat.

Political power in Washington State has become more evenly balanced in recent years. While Governor Jay Inslee continued the Democrats’ hold on the governor’s mansion, the Legislature remains under divided control by razor thin margins in both chambers. Republicans control the Senate by a count of 25-24. The Republicans formally hold only 24 seats, but one Democrat caucuses with them to form the 25-member Majority Coalition Caucus. In the House the Democrats are in the majority with 50 seats to the Republicans 48.

Governor’s 2017-19 Biennium Budget Proposal Recap

Governor Jay Inslee (D) released his $46.4 billion 2017-19 biennium operating budget proposal for Washington State. The proposal includes increasing Near General Fund State spending by $8.2 billion over the $38.2 billion 2015-17 biennial budget. This release followed and included Tuesday’s announcement of Governor Inslee’s education funding plan that proposed $3.9 billion in new dollars for K-12 education funded by $4.4 billion in new revenue.

The governor’s operating, capital and transportation budget proposals can be viewed at fiscal.wa.gov and Office of Financial Management (OFM) budget summary materials appear here.

Governor Inslee’s proposed $4.4 billion revenue package for the 2017-19 biennium can be viewed here. The governor’s proposed revenue package is derived from the following sources.

• 7.9% capital gains tax on earnings, excluding residences ($821M in FY 2019)
• $25-per-ton carbon tax ($1.9 billion in 2017-19)
• Increase to the B&O tax rate on services from 1.5% to 2.5% while increasing the filing threshold to $100,000 ($2.3 billion in 2017-19)
• Closing/altering the following tax exemptions ($300M in 2017- 19)

○ Eliminating sales tax exemption on bottled water
○ Limiting sales tax exemption for vehicle trade-ins over $10,000
○ Converting nonresident sales tax exemption to a refund program
○ Eliminating use tax exemption for extracted fuels, except hog fuel
○ Extend economic nexus for retailing B&O tax purposes
○ Limit exemption from the REET on foreclosures

The release of the governor’s budget proposals in December is the first step in the upcoming budget development process for the 2017 Washington State Legislature. The House and Senate budget proposals will be released during the 2017 session with extensive negotiations to follow.

McCleary- Budget

Washington State has incurred to date about $52 million in sanctions imposed by the Washington State Supreme Court. The sanctions are based on the state’s failure to show significant progress toward meeting the Supreme Court’s McCleary decision requirements that the Legislature fully fund K-12 basic education. The Legislative Education Funding Task Force plan is anticipated to be revealed by the first day of session. Meanwhile, Senator Baumgartner (R-Spokane) has filed an amendment (SJR 8200) to the state constitution that would give the Legislature sole authority to set school funding, as explained in this Spokesman-Review article. And HB 1021, requiring K-12 education be funded first, has been pre-filed by Representative MacEwen (R-Union).

Health Care

Affordable Care Act Impacts in Washington State

Hospital leaders in Washington State are working together to address possible changes to the Affordable Care Act (ACA), as outlined in this Seattle Times article. Hospitals hope to keep coverage for those who gained it through the ACA. It is estimated 22 million Americans, including 750,000 Washingtonians, would lose health care coverage if the ACA is repealed. The Office of Financial Management recently created this presentation outlining the impact on Washington State from a repeal of the ACA, including which counties in the state would be most impacted. In December, Governor Inslee and Insurance Commissioner Mike Kreidler (D) wrote this letter to Congressional Republicans asking them to preserve the ACA.

Cyber

In early December, Washington State formally adopted its first set of computer science standards as outlined in this Seattle Times article. There are an estimated 23,000 open computing jobs in Washington State according to the nonprofit Code.org. The adopted curriculum was based on standards developed by the Computer Science Teachers Association.

Transportation

Pay-Per-Mile System Piloted in Washington State

Washington State plans to start a pilot program charging drivers for road usage by the mile in the fall of 2017, as reported in the Tacoma News Tribune here. The yearlong project will include 2,000 drivers from across Washington State and is being considered as a possible replacement for the existing gas tax assessed on each gallon sold. It is estimated by the Department of Transportation that gas tax revenue will decline by 45% per mile driven by the year 2035.

REAL ID Solutions In View

Washington State lawmakers are looking into a solution for its drivers licenses which do not meet federal standards taking effect in January 2018, as explained in this King 5 News story. Washington State drivers are not required to present proof of legal residence to obtain a license, which is required under the federal law. The Chairs of the Senate and House Transportation Committees have proposed SB 5008 and HB 1041 to enable the use of Washington State drivers’ licenses until at least 2020. The proposed legislation also makes enhanced drivers licenses less expensive.

2017 Session Important Information

Please mark your calendars with these important dates related to the 2017 session.

Weekly session updates will be sent to you during the 2017 legislative session and will replace the monthly reports you have received during the interim.This legislative report was provided by CompTIA's contract lobbyist Tom McBride. Please contact me if you have any questions or would like any additional information regarding this update. Thank you!