With clock ticking, WA lawmakers race to cover $16 billion shortfall in budget plan

With a potential $16 billion shortfall looming, legislators in Olympia are scrambling to find budget fixes with less than two weeks left in the session. Jerry Cornfield writes for The Washington State Standard. He spoke to KUOW’s Kim Malcolm about his new article, which outlines the latest options being considered.

This interview has been edited for clarity.

Kim Malcolm: You described the latest tax hike proposals from the Democrats as a buffet. What is on that buffet for us?

Jerry Cornfield: Oh, lots of choices. There's small hors d'oeuvres like a tax on ZYN. They want to expand the tax on nicotine products. For main courses, they want to increase the taxes paid by businesses across the board, all businesses that pay the B&O tax. And they want to hit the really large corporations and the wealthy with new and higher taxes on their capital gains. So, lots of choices. Some will be more tasty than others for Democrats. They might discard and leave a few on the table.

I'm not hearing you talk about a statewide payroll tax or a wealth tax. What's happening there?

Well, Governor Ferguson put the kibosh on the wealth tax, although he did leave the door open if they want to write it in as a law, but don't really count on any money. Maybe it'll go to court, be challenged, and they can have it in a few years. The payroll tax, I think they might have gotten scared off by what's happening in Seattle, and they just didn't want to try it.

What is the Democrats' desired outcome here?

Well, their desire is to raise several billion dollars. Their current package could raise around $5 billion in the next two years, and that's to start eating away at that shortfall, estimated at $16 billion. So, $5 billion this budget, another $6 or 7 billion in the next budget. And then they can just reduce spending over the next four years, and then for them, it becomes a balanced ledger sheet.

And what are Republicans saying about this plan?

Well, they've argued against taxes from the beginning. They still don't see a need for any of them. You can expect them to vote no on all of them. I suspect they're going to try and get the governor to push off on a few of them, maybe veto a few, or tell Democrats, don't bring some of these to my desk.

And what are the chances of that? I mean, Governor Ferguson, as you said, already said no to the wealth tax.

Yeah, the wealth tax hasn't been tested. If it had even been passed into law it would have taken a couple of years to see if that money would come in, so he didn't want to go down that route. But he hasn't closed the door. He's acknowledged they need revenue. The question is, will he do something like an across the board increase in the business tax, which is probably 400,000 businesses, and take that one, or will he go after the major corporations, and tell Democrats, cut deeper so we don't have to do all these taxes?

Time is running out for the bargaining here. The session is supposed to end on April 27. What do you think is going to happen next?

Hard to predict. I always think they can get done on time, because there's so many pieces of the puzzle they can put together very quickly. But there's a new governor. Democrats have larger majorities. They may not be able to find agreement quite as quickly, and we haven't heard from the governor on any of the new proposals. He has a meeting Thursday with Democratic leaders. He's supposed to put out a statement on Thursday, so we might get a better idea tomorrow.

Anything you think we missed or that you really want us to get at?

Tomorrow's statement may give us an idea. I mean, they can do things very quickly when they want to go home, and Democrats have the votes.

You don't think there's a strong chance of it going into overtime?

Oh, I think they could. I think they could go because it's so late to have them trying to figure out the revenue, and the governor hasn't given enough clues. I mean, saying no on the wealth tax, but I didn't mention, there's a whole gas tax proposal. That hasn’t received much attention, because he won't talk about it. You know, this is really everybody's pocket gets picked this session with these plans, and one way or another, people are going to be paying somewhere.

Listen to the interview by clicking the play button above.