OLYMPIA — Democratic leaders in the Legislature said Wednesday they won't hold hearings on two initiatives to repeal the state's new capital gains tax and the state's new carbon market.
The announcement signals legislators won't act on either proposal, meaning the two initiatives will almost surely head to the November ballot.
Senate Majority Leader Andy Billig, D-Spokane, and House Speaker Laurie Jinkins, D-Tacoma, told reporters Wednesday that committees wouldn't hold hearings on either petition, two among a slate of six total initiatives to the Legislature.
The state's capital gains tax, passed by the Legislature in 2021, is a 7% tax on profits above $250,000 from the sale or exchange of certain assets like stocks and bonds. A legislative analysis estimates the repeal would decrease state revenues by about $693 million in the 2024 fiscal year and by $913 million in the 2025 fiscal year.
The Climate Commitment Act, which went into effect last year, set up a carbon market as part of the effort to curb the state's emissions over time. The state collected about $1.8 billion in the first year of auctions of emissions allowances.
The six initiatives were filed and are sponsored by the state Republican Party chair, Jim Walsh, who is also a state representative from Aberdeen.
With each initiative, lawmakers have three choices. They can adopt it into law, in which case it wouldn't go to the ballot. Their other two options are to adopt an alternative to go on the ballot alongside the initiative, or to do nothing, in which case just the initiative would appear on the ballot.
"I think we can definitively say we're not going to have hearings on these two initiatives that roll back progress and really would harm our state," Billig said. He said the initiative to repeal the capital gains tax would "devastate" state funding for child care.
Jinkins said she didn't know yet whether hearings would be held on the other four initiatives, which include measures to roll back some restrictions on when police can chase suspects, and prohibit state and local governments from imposing an income tax. Nonpartisan staff have been preparing analyses of the budget and policy impacts of each measure.
"I don't know if we'll hear all four of them or some subset of them yet, but we're getting very close," Jinkins said.
Billig said there would be hearings on any initiatives where legislators are considering passing them into law or doing an alternative.
"There will be some hearings, we don't have the final decision on which ones or when," he said. "But there will be some hearings."
The other initiatives would do the following: lift certain limits on when police can chase suspects, require parents and guardians of kids in public school be allowed to view instructional materials and student records, bar state and local governments from imposing an income tax, and make the state's long-term care insurance program optional.
Republicans have been pushing for hearings on the initiatives throughout the session, which they argue should take priority under the state's constitution. The 60-day session is scheduled to conclude in early March.
In a phone interview, Walsh said he wasn't surprised by the news that the capital gains tax repeal and carbon market repeal wouldn't be heard, but was "disappointed."
"It's calculated, cynical and a little bit cowardly," he said. "They're going to count on their political allies to fund a very spendy campaign to try to get people to vote against their own interests this fall when the initiatives are on the ballot. And I just don't think that's going to work."
