Jay’s bond, REET in reserve and Blake fix gets twisted

2023 Washington Legislature, Day 80 of 105

Everett Herald political reporter Jerry Cornfield: jcornfield@heraldnet.com | @dospueblos

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OLYMPIA, March 29, 2023 — Welcome to the Wednesday edition. Sine Die is a mere 25 days and nights away. So soon, right?

House Democrats are on my mind. Moves they’ve made this week make me think they are positioning themselves for some end-of-session deal making with Senate Democrats.

Issue 1: The Bond, Jay’s Bond

Few House Democrats are actively stumping for Gov. Jay Inslee’s $4 billion bond. A House committee gave it a hearing on Day 4. Nothing since.

Yet it is in their proposed budget. Authors said they want to keep the “bold idea”on the table for conversation. But there’s no sign Democrat and Republican senators are dying to chat about it. Is there another reason?

My snarky theory: House Speaker Laurie Jinkins didn’t want to get a nastygram from the Big Guy as Senate Majority Leader Andy Billig did when his caucus left it out of its budget.

House Minority Leader J.T. Wilcox offered a more plausible theory: House Democrats are doing a little governor management. This is important to the third-term governor. Keeping it alive allows Inslee to continue making his case with majority party members.

The end game may not be a bond but even more money to spur housing starts and assist homeless individuals. Democrats will call it a win.

Issue 2: To Reet or Not To Reet

Meanwhile, many House Democrats are interested in modifying the real estate excise tax (REET) to generate a couple hundred million dollars more a year for housing-related uses. House Bill 1628, which had 31 Democrat sponsors, would bring in those bucks with a new tier of taxation on properties with a selling price above $5 million.

Caucus budget writers left it out of their proposal, then told reporters it is still in consideration.

It is sitting on the bench in the House Finance Committee. Rep. Frank Chopp, the former speaker, is the prime sponsor. He darn well knows exactly how to get it pulled off the sidelines and passed in the final moments if necessary.

Might be. When Senate and House Democrats negotiate a deal on an operating budget, don’t be surprised if it is larger than either of their current proposals. They may turn to REET rather than reserves to pay the tab.

Subplot: Washington Realtors don’t want REET messed with in this manner. They’ve spent $400,000 on ads to get this message out.

Realtors have lots of concerns. One is a provision allowing cities and counties to increase their local real estate excise tax to pay for building affordable housing. Enticing for local government leaders who could impose this tax increase on their own. One estimate shows $50 million a year could flow into Snohomish County if the bill became law and the county and all incorporated cities took advantage.

Issue 3: Another Blake brouhaha

On March 3, the Senate passed the so-called Blake fix bill (SB 5536) on a 28-21 vote. Fourteen Democrats and 14 Republicans backed it while 15 Democrats and six Republicans dissented.

This bill did a whole bunch of things to try and address concerns of city and public safety leaders, and needs of those with substance use disorder. Most important for many of those 28 supporters was it increased the penalty for drug possession from misdemeanor to gross misdemeanor.

Tuesday night, a House committee passed its version of the bill. They pushed the penalty back to misdemeanor. There are a whole bunch of other changes related to treatment, services and how individuals are handled in the criminal justice system. Changing the penalty will be a point of discussion in the caucus for sure.

And if the House passes the bill with a misdemeanor penalty, many senators won’t be happy.

Senate Minority Leader John Braun was one of the 14 Republican votes for the bill. He said he won’t be on board if the current House version is on the Senate floor for concurrence.

“At some point if it is just a token and does nothing, we’re not interested in putting our name on it,” he said Tuesday. In the end, he said, the majority party will decide what course to follow.

There are 25 days and nights for folks to figure it out.

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