Tag Archives: John Braun

Exempting $100,000 in home value from property taxes more equitable, progressive approach to tax relief

Homeowners throughout the entire state would see tax relief under newly proposed legislation exempting $100,000 of the value of a primary residence from state property tax. Sen. John Braun sponsored a constitutional amendment authorizing a homestead exemption, which would go to voters in 2018, and legislation setting the $100,000 level, which would be allowed to grow along with property tax collections. The bills will receive a public hearing during today’s meeting of the Senate Ways and Means Committee hearing at 3:30 p.m.

“The property tax burden has shifted more to homeowners in recent decades. Given that state revenues continue to grow, we have a great opportunity to provide equitable relief to all Washingtonians,” said Braun, R-Centralia, who serves as the Ranking Minority Member on the Senate Ways and Means Committee. “Lowering the median homeowner’s state property tax burden by one-third translates to a 50 percent tax reduction in a majority of the state’s 39 counties. This would be especially impactful to rural residents who are not seeing the same growth in property value and job opportunities as other parts of the state.”

The most recent forecast by the Washington State Economic and Revenue Forecast Council anticipates the state will collect $6 billion in property taxes in the 2017-19 budget cycle and $7.2 billion in the 2019-21 cycle. Braun’s proposal projects to provide $500 million per year of tax relief to homeowners.

“Instead of shifting the tax burden with targeted relief, this equitable approach reduces the property taxes of all homeowners with everyone qualifying for the same exemption,” said Braun. “This progressive approach provides the owner of a $200,000 home with a 50 percent reduction in their state property taxes, which is more meaningful than a 10 percent reduction for a one million dollar home.”

Braun’s legislation would neither impact property tax collections by local governments nor impact property taxes paid by the business community.

If approved by voters in 2018, property tax reduction would go into effect for tax collections beginning in 2020.

Both bills would be required to implement the plan. Passing the constitutional amendment requires the approval of two-thirds of the Legislature followed by a simple majority vote of the people at the next general election.

Community college students would pay 10% lower tuition under Braun bill

More than 170,000 students attending Washington’s 34 community and technical colleges would pay 10 percent less in tuition under new legislation sponsored by Sen. John Braun.

“More jobs than ever require some training or education after high school,” said Braun. “The state’s community and technical colleges train students in a variety of incredibly important skills that set them up for success in the workforce. Making these opportunities more affordable is better for our economy and our communities.”

Tuition policy has been a key focus for Braun who sponsored the 2015 College Affordability Program, which implemented the first tuition cut in state history. This followed the 2013-15 budget that froze tuition, putting an end to massive increases seen during the previous decade. Similar to the recent tuition cut, the Legislature would be responsible for providing additional state funding to the schools to make up for lower tuition revenues to avoid impacting educational services.

The cost of in-state tuition for full-time community college students is $3,936 in the 2017-18 school year. Braun’s legislation would represent an almost $400 annual savings beginning in the 2018-19 school year.

The 2015 legislation reduced tuition by 5 percent for public community and technical colleges. It also began a reduction of 15 percent at regional universities like Western, Central and Eastern Washington Universities and the Evergreen State College, and 20 percent at the University of Washington and Washington State University.

“While we made our major two-year budget decisions last year, these intermediate years provide a great opportunity to make smaller strategic investments that help residents,” said Braun. “With the state projected to take in an additional $1 billion more in the next four years than we expected when we passed the current budget, the Legislature is in the financial position to make this strategic investment.”

The proposal projects to cost the state $22 million per year.

Lower B&O taxes for manufacturers proposed to help reverse job losses

A bipartisan group of lawmakers are hoping to revive a reduction in the state’s business and occupation tax for manufacturers and reverse the trend of significant job losses in the sector. The proposal would implement a 40 percent reduction in the tax rate for manufacturers, which passed with overwhelming support during the 2017 legislative session, but was ultimately vetoed by Gov. Jay Inslee.

“Washington’s manufacturing sector has lost more than 50,000 jobs this century,” said Sen. John Braun, R-Centralia, who sponsored and negotiated the 2017-19 budget which originally included the change. “Manufacturing jobs are critical to helping rural and suburban areas experience some of the same economic success urban communities have seen in recent years. We know we can afford this strategic investment since we paid for it in the current budget and are now projected to collect $1 billion more than we expected just seven months ago.”

The legislation phases in a reduction from a tax rate of 0.4840% down to 0.2904% by lowering it 10% annually over four years. That would bring all manufacturing businesses down to the same rate paid by Boeing and other aerospace businesses.

Manufacturing employment is the only sector in Washington to see job losses in the 21st century. Of the jobs lost, 47,200 have been outside of the aerospace sector.

The new proposal includes a tax preference performance statement which highlights that the change is intended to create and retain jobs, improve industry competitiveness, and reduce structural inefficiencies.

Lawmakers are on day 16 of a short 60-day legislative session scheduled to end March 8.

Mental health treatment capacity would expand dramatically with behavioral health bonds

Legislation sponsored by Sen. John Braun and Sen. David Frockt asks voters to approve $500 million in state bonds to greatly expand community mental health treatment facilities statewide. This comes as reports and analysis show Washington’s inadequate options for people facing a variety of mental health crises.

“Treating people with mental illness in their community keeps them closer to their family and improves long-term outcomes,” said Braun, R-Centralia, who serves as ranking minority member of the Senate Ways and Means Committee. “It’s critical that we provide the facilities to deliver a variety of evidence-based services throughout our state. Combining one of the lowest national rates of available treatment facilities with some of the highest need is a recipe for the crisis we see today.”

Washington has taken steps to invest in community treatment facilities over the last four years to the tune of an additional $50 million in the previous two capital budgets.

“We have a crisis in mental health in this state. We are under court order to improve the system in a variety of ways, and this includes expanding the entire range of facilities,” said Frockt, D-Seattle. “This bill would create a transformational funding plan over many years to address these dire needs. This measure ensures that people suffering from mental illness can be treated close to home, keeping them connected to the support systems that they’ll rely on as they recover.”

A 2015 report by the Washington State Institute for Public Policy showed that Washington ranked 49th of 50 states for the availability of psychiatric beds. The same report also highlighted that the state ranks in the top three nationally in adult prevalence of mental illness and serious mental illness.

“While we’ve made progress in recent years, it’s clear that the scale of problems demands a more widespread and flexible approach,” said Braun, who sponsored the 2017 state operating budget, which also made significant investments in mental health treatment and care.

The proposed legislation authorizes up to $500 million in general obligation state bonds to pay for capital improvements that increase behavioral health services in community settings. Funds could be used for a variety of treatment options including evaluation and treatment centers, crisis and stabilization centers, detoxification centers, transitional housing or other appropriate options.

With the bonds, the Legislature would be able to appropriate the money raised from the “Community Behavioral Health Bond Account,” a dedicated fund created in the bill. The specific capacity that could be expanded would depend on what types of facilities future Legislatures choose to invest in as well as the amount of matching or grant funds available for individual projects.

“I am looking forward to working with Sen. Braun and the bipartisan group that is sponsoring this measure,” Frockt said. “As the new Democratic chair of the capital budget, I plan to schedule hearings for this bill once we have passed a capital budget. Addressing this crisis is one of my top priorities. Good ideas know no party, and it’s time for both parties to come together to address these long neglected needs.”

The measure would be subject to a vote in the state’s 2018 general election.

Improving access to higher education

With all of the attention on K-12 education this year, some other important issues didn’t always receive the public discussion and recognition they deserve. One of the many important items we continued tackling this year was our state’s tuition policy.

As I’ve mentioned in previous emails, the decade before 2013 saw students at state colleges and universities play the role of piggy bank for lawmakers who wanted to grow government elsewhere or fill budget gaps. By reducing state support for higher education and increasing tuition to make up the difference, students and families were subject to a hidden, but expensive tax increase.

For example, an in-state student at Central Washington University paid $3,027 for tuition in 2003. By 2012, tuition increased to $7,245. Some lawmakers defended this by claiming it was due to the difficult spending choices following the Great Recession. However, this pattern began well before the economy turned, even as general government spending increased significantly.

Even with the dramatic increase in tuition at Central, students at the University of Washington, Washington State University and Western Washington University saw even higher percentage increases.

As you can see on the chart below, students and their families faced an increasingly difficult barrier to access higher education in our state, at a time when more jobs require some sort of training after high school.

Time for a change

In 2013, we were successful in implementing the state’s first freeze of college tuition rates in more than 30 years. Two years later, we successfully sponsored and funded a tuition cut ranging from 5 to 20 percent.

With rising student loan debt a serious issue facing young adults throughout the country, our prioritization of higher education caught national attention.

However, less discussed following four years of frozen or reduced tuition, was the long-term policy we created to prevent lawmakers from balancing the budget on the backs of students in the future.

Beginning this school year, in-state undergraduate tuition at all of Washington’s public colleges and universities is capped at the average growth rate of the state’s median hourly wage.

This means schools were permitted — but not required — to increase tuition by a maximum of 2.2% this year and 2% for the 2018-19 school year. By tying tuition growth to wage growth, institutions are still able to collect tuition that aligns with potentially rising costs, while students and their families are protected from the frequent double-digit increases seen between 2003 and 2013.

Despite a small increase tied to real world economic conditions, students at Central Washington will have seen a net 15% reduction in tuition between 2013 and 2019. This stands in stark contrast to the 139% increase Central students saw between 2003 and 2013. While it varies from school to school, this example plays out similarly at other state colleges and highlights how we’ve prioritized accessible higher education since 2013.

Below you can see the percentage increase or decrease in tuition for each of the state research institutions, four-year colleges, and community and technical colleges.

By stopping dramatic increases in tuition, and even turning it around, we’ve been able to make school more affordable for current students, and provide more predictable costs for future students.

While the actual tuition cut received much of the attention, this long-term tuition limiting policy will help thousands of students for years to come.

Using unexpected revenue to reduce taxes

With state tax collections and projected revenues continuing to rise (see chart), I have proposed using up to $1 billion of unexpected tax dollars coming into the state to smooth next year’s transition to Washington’s new education-funding system.

While more than 70 percent of state taxpayers will see a net property-tax decrease once reforms are phased in, the new K-12 funding system has the entire state slated for a tax-rate increase of $0.81 per $1,000 assessed value in 2018.

Creating an equitable and long-term education funding system for our state required a great deal of compromise. Anything more than a short-term property-tax increase necessary to transition between funding systems was not my preferred method.

Ultimately, a one-year increase was necessary to reach a bipartisan agreement.

Every year our state’s chief economist issues quarterly, four-year revenue projections. My proposal would use 75 percent of the unexpected revenue growth – the amount that exceeds the June 2017 forecast – over the next four years to reduce the impacts of the $0.81 state property-tax rate increase in 2018.

The most recent quarterly forecast anticipates another $500 million coming into the state under the current tax structure (again, money beyond what was forecast in June), which would reduce the current $0.81 rate increase to less than $0.50 per $1,000 of assessed value.

With the Legislature having already passed a budget that balances and provides property tax relief for a majority of our state over the next four years, this approach would provide us with an opportunity to amply fund state government and reduce the short-term impact on working families and people with fixed incomes.

Critical water rights issue still not resolved

The Legislature’s failure to address a 2016 Washington State Supreme Court ruling known as the “Hirst” decision harms not only families wanting to build a home, but also our overall state economy.

As a refresher, the ruling changed how building permits are issued when the home relies on a small private well for water. The ruling made it difficult, if not impossible, for the applicant and property owner to drill a new well and therefore receive the proper permits to build a home.

In the Senate, we passed a bill that would address the situation by continuing the state’s long-standing policy of exempting these small household wells from more burdensome requirements, given their minimal impact on water availability. However, our colleagues in the House of Representatives have refused to vote on this or any other measure that would bring relief.

Although negotiations continue, we’ve yet to make meaningful progress on this issue, which affects many Washingtonians in rural areas, including those who already own land and were attempting to build.

We recently gained a better understanding of the broader impact this has on our state’s economy through lost construction jobs, lower property values and reduced tax revenues. Click here to read the full study.

This comes at a time when rural Washington is already facing much higher unemployment rates than the Puget Sound area, and continues a disturbing pattern of state decisions and policy choices that harm our rural communities – a trend I’ll discuss more in my next email update.

Use unexpected tax revenues to reduce short-term property-tax impacts

With state tax collections and projected revenues continuing to rise, Sen. John Braun says he’s willing to use up to $1 billion of unexpected revenue to smooth next year’s transition to the new education-funding system lawmakers adopted in June.

While more than 70 percent of state taxpayers will see a net property-tax decrease once reforms are phased in, the Legislature’s overhaul of the K-12 funding system has the entire state slated for a tax-rate increase of $0.81 per $1,000 assessed property value in 2018.

“Creating an equitable and long-term education funding system for our state required a great deal of compromise,” said Braun, R-Centralia, who serves as chair of the Senate Ways and Means Committee and a member of the education funding negotiating team. “Anything more than a short-term property-tax increase necessary to transition between funding systems was not my preferred method. Ultimately, a one-year increase was necessary to reach an agreement across the aisle.

“Having heard similar concerns about property-tax increases from the governor and my Democratic colleagues, I expect we will see bipartisan support for this legislation.”

Every year state government issues quarterly, four-year revenue projections. Braun proposes using 75 percent of the unexpected revenue growth – the amount that exceeds the June 2017 forecast – over the next four years to reduce the impacts of the $0.81 state property-tax rate increase in 2018. The total offset to the state property tax would be capped at $1 billion.

“With the Legislature having already passed a budget that balances for the next four years, this would provide us with an opportunity to fully fund state government while reducing the impact on working families and people with fixed incomes,” said Braun.

Beginning in 2019, under Washington’s new education funding system, a school district’s local levy will be limited to a maximum of $1.50/$1,000 of assessed property value, up to $2,500 per student. Braun said more than 70 percent of state property owners will have a lower tax rate between 2019 and 2021 than they do now, even if all school districts fully utilize local levy capacity. The amount of people receiving property tax relief would grow if school districts used only a portion or none of their locally allowable levy.

Once this year’s education-funding reforms are phased in school districts will receive the same or more money in state funding alone as they currently take from state and local taxes combined.

Improving career opportunities for Washington students

Sen. John Braun was presented with the Legislator of the Year for Career and Technical Education award today by the Washington Business Alliance for his work to support career opportunities and skills training in the new state budget. Braun, who serves as chief budget writer in the Senate, fought for additional investments to better prepare students for an increasingly competitive workforce.

“With each passing year, today’s students and tomorrow’s employees face more diverse and competitive demands. In order to be prepared to earn good jobs, students must have the appropriate skills, whether that be through vocational training, apprenticeships, or four-year college,” said Braun, R-Centralia. “Not every student has the same career path just as the job market is not one-size-fits all. This should be reflected in how we support and prepare students.”

As part of the award presentation, local students, teachers, employers, and school district officials gathered to learn more and discuss the importance of providing multiple pathways to employment, including career and technical training.

The new state budget increases investments for career and technical education by more than $200 million over the next four years. Braun was the architect of the Senate budget proposal and served on both the education and overall budget negotiating teams.

“The business community is grateful to Senator Braun for recognizing the need for a talent pipeline to the technically skilled positions industry currently struggles to fill, which are vitally important to growing our Washington economy,” said Jene Jones, education policy advisor to the Washington Business Alliance. “Senator Braun’s leadership led to landmark investments for career and technical education students statewide, and we congratulate and thank him for the lasting impact of his work.”

Career and Technical Education Washington promotes and supports middle and high school programs that provide 21st century academic and technical skills for students. Through CTE, students have the opportunity to explore career options, especially in high-demand and high-growth fields. They are encouraged to identify career goals and can take classes at skills centers and community and technical colleges that apply math, science, and other academic subjects in a real-life, hands-on way. They can also pursue a registered apprenticeship, industry certifications, and two- and four-year college options.

The new 2017-19 budget, sponsored by Braun, was approved at the end of the 2017 legislative session and went into effect on July 1st.