House Democrats on Monday released a revised $38.4 billion budget proposal that calls for about $550 million in new taxes, down from the $1.5 billion in taxes they sought in their March budget proposal.
The two-year operating budget proposed by Democrats remains about $640 million apart from the no-new-taxes budget proposal released last week from mostly Republican Majority Coalition Caucus.
House Majority Leader Pat Sullivan said the latest Democratic offer is a “substantial compromise” that moves toward the Senate on several items.
“We reduce our spending substantially and we reduce our revenue package by two-thirds,” Sullivan said during a budget briefing with reporters.
Lead budget writer Rep. Ross Hunter said Democrats are reducing by $207 million the amount allocated to school districts to buy health care benefits, although he cautioned that could change as talks with legislators continue.
Democrats on Monday highlighted where they spend more in their budget than Republicans, including $168 million in human services, $150 million for teacher cost-of-living pay raises, $114 million for early learning and $50 million for mental health.
To pay for the increased spending, Democrats are calling for a capital gains tax of 5 percent on the profits of sales of stocks and bonds that would raise between $500 and $600 million in new revenue for the state. The tax would affect about 32,000 residents.
Senate Republicans have maintained the state does not need new taxes to meet budget and education spending obligations. The $37.9 billion budget proposal released last week by Senate Republicans increases spending in several areas compared to their March budget, including paying the full cost of negotiated pay raises for state workers.
Hunter said legislators also plan to consider a bill this week that addresses school levies and teacher compensation. The bill is not yet scheduled for a hearing — we’ll update this with the TVW link once it is.
Full budget documents are available here.