Washington House Democrats released a budget plan that they say satisfies the state Supreme Court’s McCleary education-funding order by enacting a new tax on capital gains and restructuring the state’s business taxes.
OLYMPIA — Washington House Democrats on Monday released a budget plan that they say would satisfy court-ordered K-12 education funding by enacting a new tax on capital gains and restructuring the state’s business taxes.
The Democratic proposal, a $44.6 billion 2017-19 state operating budget, would raise about $3 billion in new taxes. It would institute a 7 percent tax on capital-gains earnings above $25,000 for single filers and $50,000 for joint filers.
That would affect about 48,000 tax returns, according to Rep. Kristine Lytton, D-Anacortes, chair of the House Finance Committee.
It would also raise rates for the state’s business-and-occupation tax — but exempt businesses with less than $250,000 gross revenue from paying anything. The proposal also seeks to raise revenue by rolling back a handful of tax exemptions.
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The proposal spends $7.1 billion over four years to fund changes necessary to comply with the state Supreme Court’s McCleary decision.
In that 2012 decision, the court ruled that Washington was violating its state constitution by underfunding K-12 schools. The justices since 2014 have held the state in contempt for failing to make enough progress on a school-funding plan.
The Democratic budget “lays out a plan of how it’s going to be implemented, of how we’re going to provide a great education for kids and compensate our teachers,” said Lytton.
“And we have the revenue mechanism to do it,” she added.
The Democratic plan would also freeze tuition at the state’s colleges…