Some hope in Olympia?
State Sen. Rodney Tom (D-48, Medina), the leader of the Republican-dominated Majority Coalition Caucus in the state senate, has said that one big agreement, like a key piece in a puzzle, could help a larger complicated budget deal quickly fall into place.
The house Democrats and the MCC reached agreement on language last night on one major line item in the Democrats' base budget—a $160 million fix to the voter-approved estate tax that would close a loophole that had allowed heirs of married couples to avoid the tax. (The legislation is known as the Bracken fix because it closes a loophole established by a state Supreme Court ruling in the Bracken case in which the Bracken estate successfully argued they didn't have to pay the tax.)
The compromise? The MCC added language, manicured by the Democrats, that would exempt family businesses that would slightly lower the revenue in upcoming biennia (by $3 million in the 2015-17 biennium and $8.2 million in the 2017-19 biennium), but largely keep the Democratic budget intact (the agreement simultaneously increases the rate on top incomes), with just a $100,000 hit from the small business exemption this time.
The house, which passed an original estate tax fix in the regular session and the first special session (only to have the MCC-controlled senate balk), passed the new compromise-version today, sending it over to the MCC. And in a good sign, even though it was largely a party line vote, 53-33, Republican budget leader, Rep. Gary Alexander (R-2, Olympia) voted with the Democrats.
"The MCC has to make a choice—whether they're going to decouple this important fix from their broader political interests."
I have a message in to the MCC to ask if they will, in fact, pass the legislation this time. (Earlier this week, in the first special session stand-off, the MCC cued up the Democrats' estate tax fix (though they slashed $80 million from it over two biennia by giving a much broader exemption to small businesses than the one in the new compromise) by passing it out of the ways and means committee. They did not, however, advance it, holding on to it as a bargaining chip that they hoped to exchange for one or more of the policy bills they'd sent over to the house, such as a business-friendly workers' compensation bill.
Will the MCC actually move it this afternoon without tying it to other policy bills? House Democratic finance chair Rep. Reuven Carlyle (D-36, Queen Anne), who's been passing the estate tax fix over and over throughout this extended legislative season, said this morning after the latest successful house vote: "The MCC has to make a choice—whether they're going to decouple this important fix from their broader political interests."
There is certainly an extra incentive on the estate tax fix—if they don't pass the bill by tomorrow, the state is going to have to start issuing checks to heirs that took advantage of the loophole, which could erase the $160 million.