Dear Friends and Neighbors,
Every year, the House and Senate take turns which chamber releases their state budget proposal first. This year, it was the House majority's turn to go first, which is the House Democratic Caucus. The House Democrats released their proposal for the 2015-17 operating budget on Friday, and the Senate majority, the Senate Republicans, released their proposal on Tuesday.
In some ways, the proposals are similar. Both proposals fully fund basic education as required by our state constitution and in the Supreme Court case McCleary. Both proposals provide long overdue increased mental health funding and teacher COLAs. They also address higher education costs and state employee raises.
In other ways, these are two very different proposals. One budget increases taxes by $1.5 billion, the other does not rely on new tax increases at all. One budget assumes more savings in state government operations with reforms. They fund different aspects of government at different levels.
The House Democrat proposal includes $1.5 billion in new and increased taxes, including:
- An increase in B&O tax rates for service businesses including child care centers, dry cleaners, janitorial services, home nursing services and residential care facilities. You can view the full list of people affected here.
- A new capital gains tax, also known as an income tax. It wouldn't just apply to the sale of stocks and bonds, but also to the sale of investment property, like a summer cabin.
- Repealing the tax exemption on bottled water. You may remember voters soundly rejected this tax increase in 2010.
- Eliminating the sales tax deduction on internet sales. Some online retailers are voluntarily collecting sales tax, but this would mandate every retailer to collect the new tax from you.
Suspension of the state spending limit passed by voters to ensure our state budget doesn't grow faster than our population.
- Increased state spending by $5.1 billion from the 2013-15 budget to the 2015-17 budget.
- Freezes tuition in higher education so students will not have to pay more to attend the same school. Two years ago, Sen. Barbara Bailey initiated a freeze on higher education. I'm so glad the House is following suit again this year.
- Provides all state employees with a 3 percent raise in 2016 and a 1.8 percent raise in 2017.
Though the Senate Republican proposal is not perfect, it offers a very different take on the budget, without tax increases, that will provide legislators with more options in budget decisions. The Senate Republican proposal contains:
- No tax increases, but would close 12 tax exemptions.
- Increased state spending by $4 billion, based on $3 billion in current revenue growth, marijuana revenues and closing tax exemptions.
- Tuition cuts, by an average of 25 percent, in higher education for the first time since the 1970s so students will actually pay less to attend the same school. I'm pleased to see they are taking their commitment to higher education a step further by reducing the burden on students and their families. Having educational opportunities was my pathway out of poverty, so I am passionate about increasing access to more students.
- A flat $1,000 pay raise per year (2016 and 2017) for all state employees. This provides income equality for employees – it makes a bigger difference for those employees not making as much as some of those in management. I would like your input on which you would prefer – a small percentage increase in pay, or a flat $2,000 pay raise?
The House and Senate will be voting on the respective proposals tomorrow. I would appreciate hearing what you think. Once the proposals pass, the two chambers must negotiate and compromise on one final operating budget. This can and should be done by our April 26 deadline for the end of session.
It's an honor to serve you in our beautiful state Capitol!