This week, action began on tax reform plans.  Both the House and the Senate worked on the governor’s proposal, including income tax reductions, but differ on federal deductibility.

      House

The House Ways and Means Committee took up, amended, and passed HSB 671 (now HF 2489).  HSB 671 had been the governor’s proposal and with an amendment is now the House tax proposal. The updated bill is a nearly $1.3 billion personal income tax cut over the next five years but does not end federal deductibility. HF 2489 is expected to be debated on the House floor next week.

       Senate

The Senate tax proposal (SSB 3195) which passed out of a Senate Ways and Means subcommittee this week would reduce both personal and corporate income taxes by roughly $2 billion over the same five-year timeframe and does end federal deductibility. The Senate is now working from SSB 3195 which is the governor’s proposal and plans to dramatically amend it.  Specific amendment language was not available at the time of the subcommittee, but the attached amendment summary was distributed during the meeting. The Senate Ways and Means Committee plans to attach the amendment to SSB 3195 and pass it out of committee next week. 

Due to the fiscal impact of any of the three tax proposals from the Governor, House, and Senate, the FY 2019 budget cannot be set until an agreement is reached on tax policy.  Despite this, budget discussions have been taking place behind the scenes and leadership in both chambers have indicated that they are close on numbers.  They have also indicated that once there’s an agreement on tax policy, the budget approval process will not take very long. 

Next Tuesday, April 17^th is the 100^th day of session and the scheduled adjournment date, but it is likely that session will take at least the rest of the month.

Election 2018

Annette Sweeney (R) won the special election in Senate District 25 to replace former Senate Majority Leader Bill Dix.  This restores the Republican’s 29-20-1 advantage in the Senate.  Senator-elect Sweeney has a primary opponent in June, and if she wins the primary she will stand for re-election in November.  Sweeney previously served two terms in the House and was chair of the House Agriculture Committee.