1. Washington state’s latest revenue forecast shows tax revenue increasing $3.3 billion through 2023, a major jump from the Washington State Economic Revenue and Forecast Council’s most recent (November) projection. The new projection is an improvement on what had already been an upward trend after a grim forecast last June predicted $8.8 billion in lost revenue through 2023, and brings the state much closer to its pre-pandemic $52.3 billion projection.
Wednesday’s report shows that the state’s revenue recovery is being driven by speedy vaccine distribution, the two federal stimulus packages that passed in December and March, which gave qualifying Washington state residents $600 and $1,400 checks–the $4.25 billion expected to go to the state was not factored into the forecast–, and near-record high taxable activity from real estate transaction and higher than predicted retail sales.
Andy Nicholas, senior fellow at the progressive Washington State Budget and Policy Center, says it’s no surprise sales taxes and real estate excise taxes are keeping the economy afloat. “Our whole tax code is propped up by lower- and middle-income working people in Washington state,” he said. “The gains that we’re seeing are gains from a tax code that disproportionately put responsibility for funding public services that we all benefit [from] on those with low- or moderate incomes and asks very little from those at the top.”
Nicholas says the state is currently stuck in a position where it can only hope to keep funding for public services at the same amount they were before the pandemic—which he says was not enough.
Several bills in the house and senate, like the capital gains tax (SB 5096) and the wealth tax (HB 1406), hope to fix the state’s tax code and get wealthy residents to pay more. Democratic budget proposals for the next biennium, likely coming next week, may indicate what taxes they expect to pass this session.
The Office of Financial Management said in a press release on Wednesday, “The increase in projected revenues would leave the state with a net surplus of nearly $3 billion — including reserves — at the end of current biennium.” The recently passed American Rescue Plan Act of 2021 will infuse an additional $12 billion into the state and may help maintain programs, but ultimately the money is only a one-time infusion and needs to be spent by 2024. Washington state has received roughly $20 billion in federal aid since the start of the pandemic.
“This is moment where we need to be making big and bold investments in communities,” Nicholas said. While the federal aid will help, “[The government} needs to be thinking about how we are going to set ourselves up for long-term adequate level funding and that has to be done with new, equitable sources of revenue.”
2. If Seattle City Attorney Pete Holmes’ prediction is correct, the city’s labor negotiation team won’t sit down to negotiate with the Seattle Police Officers’ Guild (SPOG) until after new mayor takes office in 2022.
In a presentation to the Community Police Commission on Wednesday, Holmes hypothesized that contract negotiations with the city’s largest police union “probably” won’t begin “until sometime next year,” and that the negotiators may not have finalized the “parameters” for bargaining—the ground rules for the process—by the time the next mayor is inaugurated in January. He also suggested the next mayor could begin the search for a permanent police chief at roughly the same time; current Interim Seattle Police Chief Adrian Diaz stepped into the role when former Chief Carmen Best retired on short notice in September 2020, and Mayor Jenny Durkan has declined to begin the search for a permanent during her term.
Contract negotiations with city employee unions can be a lengthy process—the last round of bargaining with SPOG ended in 2018 after more than a year of negotiations. At that time, SPOG members had been working under an expired contract since 2014. The 2018 contract expired at the beginning of this year, so SPOG members will once again work under an expired agreement for the foreseeable future.
Delayed negotiations would also mean that the numerous controversial features of the 2018 SPOG contract will remain in effect for at least the coming year. Before the Seattle City Council approved the contract in November 2018—responding in part to pressure from Durkan to approve raises for union members—police accountability advocates, including the CPC, condemned the agreement for undercutting years’ worth of advocacy and a landmark 2017 ordinance that strengthened police oversight and discipline. Continue reading “Fizz: Revenue Rebounds, SPD Negotiations Delayed, and Sawant Slams Lazy Recall Campaign Mail”