Gov. Jay Inslee on Thursday defended his plan to raise $1.4 billion in revenue with a capital-gains tax, cigarette taxes and other changes, saying he embarked on a “long and arduous” process to come to that conclusion.
“I’ve been wrestling with these budget numbers for several months,” Inslee said at the Associated Press Legislative Preview forum. “Legislators are just now returning from their private lives and businesses and farms. They’re now going to have to look at the hard numbers, and they will see we have some real challenges.”
Responding to Republican criticism that a capital-gains tax would be too volatile, Inslee said that 43 other states use it as a “well-known, well-tested, predictable source of financing.” The governor’s budget proposal calls for a 7 percent tax on capital gains earnings from stocks and bonds above a certain threshold, which he says would affect less than 1 percent of Washingtonians.
Inslee’s budget would also increase the state cigarette tax by 50 cents and add a tax to e-cigarette and vapor products. He said on Thursday that e-cigarettes are a “gateway” to nicotine addiction for kids — not a way to quit smoking traditional cigarettes, as many smokers say.
The governor said he’s not surprised at the “heavy skepticism” that is being expressed at his budget ideas, including a proposal raise $380 million by charging polluters for carbon emissions.
Much of the new spending would fund education. Inslee said he is open to other solutions offered by Republicans.
Lead Republican budget writer Sen. Andy Hill said earlier in the day it is a “myth” that the state is facing a budget deficit, and believes it is a tactic to “scare” people to raise taxes. He says he believes the issues can be solved with existing revenue.
Inslee disagreed, calling it a “rhetorical debate.”
TVW taped the forum — watch the governor’s segment here.