Stokesbary on TVW: No new taxes, smarter spending, real school choice, and a fix for housing costs

how are minority Republicans in the Washington house trying to influence the policy debate this year and what are their priorities joining me now is house Republican leader Drew stokesbury welcome to the program great to see you yeah great to see you Austin so uh the initial bill cut off out of the house of origin has passed you're coming up on fiscal cut off at the end of this week uh what's your Top Line 30,000 foot view assessment uh so far of the first third of the session you know so far the session's going as as well as you could expect for Republicans conditioned on the fact that that we're in the minority um obviously I think we would like to have some more Republicans in the legislature to restore more balance but um given the margins of what they are I I think we've been uh as successful as we can be and um as the minority our job is as much to influence uh legislation as it is to influence in the court of public opinion and I think uh we're doing a tremendous job there uh talking about our priorities to the people of Washington and I I think they largely agree with with the topics that we've been talking about so we'll talk about some of those issues or several of those issues in a moment I want to uh remain sort of at a higher level here and kind of go back to the beginning of the legislative session when Governor Bob Ferguson was inaugurated and gave it a a speech that uh made a specif included specific call outs to Republican legislators talked about specific pieces of legislation he wanted to help get across the Finish Line what has happened since then in terms of interactions with conversations with the new governor and minority Republicans at least in the house side yeah uh the the governor's office uh and uh House and Senate Republican leaders have a a bi-weekly meeting set up uh so I think we've met three times so far uh which is about three times more often than I met with his predecessor during uh my entire first session as house Republican leader um you know and I got to say it's a breath of fresh air there's going to be plenty of things that we disagree with but there's some things that we do agree on and we're we're working on those and the governor has been a great partner to to try to get those things done um it's great to have a governor who lives on the same Planet as the rest of us um for example you you mentioned that uh in his inaugural address he called out some specific policy areas and um for some for some context one of the ones he called out was to help make sure that uh the state is actually delivering on the promise of exempting fuel for agricultural purposes from the uh the fees associated with the climate commitment act um when I met with uh former Governor Insley my first uh week or second week as uh in session as Republican leader uh this was the very first topic I brought up to him and his answer was well I'm told that department of ecology has already solved this problem so I don't think you need to worry about it anymore next question please um so to go from you know that attitude uh denying the problem exists to a year later having the new governor admit the problem exists and promising to solve the problem uh is a tremendous breath of fresh air four years from now you know the ultimate test will be did he accomplish what he promised but you know he's still in his first month on the job and I'll take a guy that can admit problems and promise Solutions over a guy denying problems any day of the week uh it's so let's this kind of leads me to wonder about the budget which is obviously a huge issue this year because the state is facing uh fewer revenues less Revenue than it than has it has historically been bringing in and so there is a gap there and it was interesting again to see sort of the early signals the governor sent about uh Revenue options versus scrubbing the budget and clearly there was some daylight there maybe still is between majority Democrats in the legislature and this new governor at least as he gets up to speed on the budget what is your sense so far in the conversation and I I pretty sure I know where you stand on a lot of these the tax issues and we'll ask about them in a moment but what's your sense right now of you know in these conversations with the governor where he's coming from and what to what extent that aligns with what you guys want to do yeah great great question you know and first I need to clarify that uh we actually aren't collecting less Revenue um our Revenue growth is not as high as we once thought Revenue growth was going to be um you know but it it we're still moving along uh you know instead of going 60 M hour we're going 50 m an hour now we're still driving down the highway pretty good um and so you know I I think that's an important distinction because sort of by definition when we get down the road and we're talking about about passing a budget you don't actually have to reduce spending to below where it was if we spent money in this upcoming 25 27 by anym at the same levels we spent in the 23 25 bym we'd have a billion dollar Surplus um we have more money coming in this year than last year and more money coming in next year than this year um so I think that's important to know but but beyond that I mean in terms of talking with the governor they've been serious conversations um very policy focused uh I do think he is genuine in wanting to find ways to uh make our budgets more sustainable um you know like I said in in the context of his inaugural address it was a breath of fresh air uh he is talking about some of the things that Republicans have been talking about for several years uh I have been able to dust off a few bills that I have proposed uh when I was ranking member on the Appropriations Committee um and you know point to those as some potential medium and long-term solutions for getting our budget structural budget challenges um under control um you know when I was when I was the lead Republican on budget stuff we I was always looking for ways we could Sol save money or solve some of the structural problems one of the challenges you run into um you know when it's by constitutional design the legislature passes laws including the budget and the executive implements it so in some ways it doesn't matter how many votes in the legislature there might be for more efficient and Effective Government if the governor isn't willing to you know execute in a more lean and efficient fashion you're banging your head against the wall wall and it you know from again it's the month into the job um you know ultimately I think me and my constituents are going to judge him over what he does Over a four-year period but at this point in time every conversation I've had with him suggests he's incredibly serious about making government work more efficiently and more effectively in solving some of these long-term budget challenges that have plagued us for the past couple Cycles is there an example or two you could give us of of ideas you're dusting off is there any indication yet specifically from the governor on something that he might take a look at that yeah you know I I I don't want to put words in the governor's mouth he can you know certainly address which of these which of these ideas he likes and doesn't like but uh you know one idea that I have proposed in the past was to try to shift us away from our maintenance level approach to budgeting to a more zero zero based budget approach um you know for for those that I suppose if you're watching this program you there's probably a good chance better than average chance you know what those terms mean but um the way we definitely we traditionally do budgets around here is we look at what we spent last year and for the most part the legislature assumes that everything we've done before is a good idea and we spend most of our bandwidth talking about what changes to make from there and it's almost that's sort of mainten what's maintenance level spending to maintain what we're doing and then what else you want and you know it almost always results in just adding new programs to the mix and very rarely do we ever go out of our way to examine whether something's actually working well and and talk about getting rid of it a Zer is you sort of every you know more often you're going through everything top to bottom with a fine tooth cone home and just because you did it a year ago or 5 years ago doesn't automatically mean you keep doing it a challenge that we have with sort of implementing that is the budget has grown in the last decade um from 30 billion ofum to 775 billion of banum uh just from a mechanical standpoint that's a lot of programs and lie items to go through every year uh we're a part-time legislature we have a relatively limited staff so you know one one way I've tried to suggest we Square the circle is you divide the budget into SA four or five buckets uh and every two years you zerobase one of those buckets and that way over a 10-year period you've been zerob basing everything and revisiting everything but you're not trying to do all of that work year in year out yeah this is a more manageable way to solve the problem um another another bill I had which actually the governor began to do uh even without needing a bill is this idea of asking agencies what are things that you would cut if you needed to again the the agencies are the ones that are um executing the bills that the legislature has passed or the ones out there delivering Services they know better than most part-time legislators where parts of their budget could be paired back because you know contrary to what most Democrats will tell you Republicans don't want to cut services that people depend on we don't we don't want um to to hurt Washington's most vulnerable so you know when we look for Budget savings we're looking for savings that can be realized without harming people and the agencies know what those are better than almost anybody else so so you got to work with the agencies to identify those and to his credit even without a bill having been passed the governor has already asked the agencies to go through that exercise and come up with you know either three or 6% depending on what kind of agency you are uh savings options do you and there are a lot of Republican L states that are doing state level does uh kind of you know borrowing directly from what president Trump is doing and what Elon Musk is in the midst of if if you were in power if there was a republican in the governor office would you want something along those lines oh I mean I I think if if Republicans uh were in the executive office yeah I mean we'd absolutely be looking at um you know not just not just where you could realize Savings in the budget but where you could realize savings at the agency level even without uh a reduction in Appropriations and I think we'd be taking a much more critical eye as well to um where the agency what what sort of private entities the agencies have been issuing you know grants and things like that to often times if you're only looking at the budget which is what we as legislators usually do something will show up as $10 million to Department of x to deliver grants that do y and z um and that per se isn't necessarily bad um often times so often times the problem isn't that we've you know given X dollars to Y agency the problem is that y agency has given a grant to Z organization to do some silly off-the-wall thing with that money um so the legislature doesn't have a lot of control over that whereas the governor uh and agency directors would and I definitely think that you know Republicans sitting in that office would take a really really close eye to where that money's going what about just the number of state employees I know that the governor has imposed some hiring freezes and slowing the pace of spending because of the budget situation but again if Republicans were in charge would there be an effort as we're seeing at the federal level now to reduce census you know again I I think that gets back to the point I made earlier about the best judge of that is going to be the agencies to to the ex that the agency can continue to provide the services that are important to washingtonians with fewer headcount fewer employees than yet absolutely we don't we shouldn't be hiring employees that serve no purpose and aren't adding value to the agency to state government um you know but to the extent that that uh State Personnel really are necessary to deliver those Services then yeah absolutely we want to make sure that um effective Services can be delivered to washingtonians so you have articulated the idea that revenues are growing just not as fast as they uh have been over the last several years and that uh you could essentially um spend what you did in the current bium and and the next bium and I think you said have a billion dollars and and kind of left over Democrats are telling a very different story they they are saying that a no Revenue budget would mean catastrophic cuts to Medicaid and Health Care cuts to Human Services and early learning programs cuts to higher education cuts for long-term care and developmental disabilities in the billions of dollars hundreds of millions of dollars of cuts to Corrections and Behavioral Health I mean these are two very different narratives uh but they're they're giving numbers and saying these will be devastating Cuts well they're they're giving numbers in the aggregate they're they're first of all they're not identifying specific programs they're saying oh $3 billion will be cut from Department of Corrections um you know does does that mean that violent offenders are going to get released early I think they said in that case 376 million 3.5 billion for healthcare but okay you know but but the principle is the same I pick pick whatever number uh the irony is you know sometimes Republicans uh you know we'll we'll frame it as hey you know let's let's just make a blanket across the board cut um and and you know sort of handwave it all way and and Democrats um not inaccurately criticize that as you know hey that that's an abstract idea that's an abstract process you got to talk about you know identify actual programs that that you you would cut here have Democrats essentially doing everything that they've complained about Republicans talking about for years they've you know picked some numbers picked some subject areas but haven't identified what actually would be cut you know also they are their their exercise sort of takes us through a worst case scenario yeah you absolutely could cut 101 billion from the state budget and hurt people if that's what you wanted to do but that's not what Republicans want to do Republicans are looking for 10 10 billion in in savings that would not impact the public is that the number you're using I mean that's that's a somewhat arbitrary number one me I know that we're talking about a potential 10 to billion dollar 10 to 12 billion doll shortfall over four yeah over is it over two years over four years remind you know so since we have to balance the budget over four years I try to talk about savings and spending in in fouryear total numbers so so so let me just um challenge the premise I guess you are saying you believe that you could cut $10 billion out of this $70 billion budget and not have they use the term catastrophic but even bad consequences to use a milder word I I believe that's a chunk of money yeah I well I I believe that you could you could pass a budget that balances over the two and four-year period that doesn't raise taxes and doesn't harm washingtonians that depend on state Services absolutely so what what should in the minority um and I I know that there's more of a tradition or at least recently of Republicans being in the room on the Senate side as budgets are crafted so let's maybe start there what and I should have noted although you alluded to it before you were the Senate house Republican leader you were the ranking Republican on the um Appropriations Committee and the budget committee so the budget stuff is very familiar to you but are Republicans in the door for the for the meetings what's that relationship look like with the majority on the budget writing side you know for for the for the most part no um and and probably the good comparison here is the capital budget which uh has a a for the most part necessary tradition of bipartisanship uh because the capital budget is funded by issuing bonds and constitutionally you need a three- fifths vote to approve bonds um almost always uh one party or the other has a majority but not a three- fifth majority so by necessity the budget becomes bipartisan because there's the implicit threat that the minority won't vote for the bond Bill unless they're part of the spending side of the equation so what's happening this year is actually a good illustration of what's possible uh and what are choices being made by the majority party um even though the Democrat house Democrats now have just over a three-fifths majority they have a one vot just by one vote they've got enough to pass a bond bill without Republicans they are continuing to engage in that budget uh on a good faith bipartisan basis with Republicans in the room on the same equal footing that they've always been um that could be done on the operating budget but for whatever reason Democrats don't want do that um I think the state's in much worse shape had Republicans been brought in the room 3 four budget Cycles earlier maybe we would still have some deficit we certainly wouldn't have the you know 10 or 15 billion that a lot of Democrats are talking about now uh and so unfortunately uh majority Democrats still do view that budget as a very partisan one um I know that uh Cher Ormsby and Ry member Travis coutur have you know a a friendly working relationship um you know they might be talking in very abstract terms you know about some very highlevel ideas there might be a little bit of a conversation there but um Republicans are not in the quote unquote room uh they're not part of a line by line process deciding if if things ought to be in or out of a budget proposal why you you have made the case for a no new taxes budget but why not what we usually and often see is a mix of cuts when this when the state has to balance a budget because revenues are not coming in like they used to it's usually a combination of cuts and taxes why not sort of embrace that going in and say hey Democrats we're not going to want as many taxes as you but we won't say no to all taxes but we would like to be in the room we'll work with you and we think we can come up with a budget that doesn't mix the two well I certainly think you've got uh individual Republicans out there trying to do just that and and find Democrats that are willing to come up with some sort of more more reasonable Middle Ground compromise I think there's there's an important difference here though um we're not in a recession no serious Economist thinks we are the argument is if the economy is doing pretty good overall or great overall um and like I said a minute ago revenue is not down it just isn't quite growing as quickly um and if you take you know a a broader view of of budget growth over say the past five or 10 years um Revenue growth has already been outpacing uh inflation and population growth so I think for Republicans it it's not that taxes are a middle ground compromise and the compromise is just smaller taxes it's that we don't we don't need them at all because the because because of the the state's robust economy growth has already been phenomenal and we have more than enough resources to meet all the demands um and ensure that their services for Washington's vulnerable population um ensure that that education is is properly funded um you know but aren't raising more taxes beyond the amount of Revenue that's already been coming into State coffers I don't want to spend giv your position a lot of time litigating specific tax proposals since I think you've made it clear you're not going to like any of them but it does seem like Governor Ferguson took the wealth tax off the table or at least downgraded it and some of his early comments uh he uh there there are other proposals including a bno sir charge on large the largest businesses in the States state and then there's a whole bunch of other ideas that are out there that have sort of been fled or people are kind of testing the the the winds I guess on um but if so maybe the way to ask you the question is this what is the least offensive if they're going to go down this road and they have the votes uh and what would be the least from your perspective damaging harmful or offensive tax I I have I haven't seen it yet Austin um you know the Democrats have called it a wealth tax um it's really a tax on innovation um you know for every uh Rockefeller Heir that is born with $100 million do spoon in his mouth uh there's there's 10 Jeff Bezos and Bill Gates that build some world changing product that allows them to build that kind of wealth um and they do that through Innovation and this be because uh of what a what a great uh State we have um people like Jeff Bezos and Bill Gates have chosen Washington to be where the place where they build their businesses um and that's allowed us to grow state revenue significant and and provide a lot of services um one of the proposals is a Jobs Tax um you know the same party that the jump tax yeah the same party that said that's a that's a tax on total compensation paid to employees over the Social Security threshold yeah and and you could I mean it would be there's I think it's focused on businesses of a certain size yeah you know but but the idea here is that the the same folks that propos the climate commitment act which says we want less carbon so therefore we're going to put a price on emitting carbon and that will lead to less emission of it um you know that exact same model would apply to jobs if if if you want Less jobs then make it more expensive to hire somebody that's exactly what this proposal would do and it doesn't have to be theoretical we've seen it play out in Seattle where companies like Amazon following Seattle's Jobs Tax have moved all of their new hires uh across the lake over to biew um one of the other proposals is is a real estate excise tax um we've got a huge housing affordability crisis you can't make housing more affordable by making it more expensive but as is on more expensive houses you know over I can't remember what the threshold is is it 3 million correct but but you know first of all it's all about Supply so even even a really expensive house um somebody's going to move into that and they're going to vacate a slightly less expensive house which will allow somebody to move into that and eventually there's somewhere there's a there's a new housing unit uh made available for um for somebody even if they can't afford a 3 million house eventually a house that they can't afford becomes available if we're building new doors second of all multif family housing complexes you know once you get past you two or four units are always going to be on the upper end of that Spectrum so uh you know I don't think we want to make uh multif family housing where we're improving density and uh creating more foral housing more expensive either um and then the last the last one I'll mention is is the the B tax um if you know charge yeah one of the things an additional the one one proposal is an additional 1% of businesses with over $500 million a year in um I guess revenues yeah one one of the things that we hear often uh from folks U in in the Democratic caucuses is how regressive Washington's tax code is if you run down the study that they that they site uh and run down sort of why they reach that conclusion about Washington it is in part because this um you know public policy Institute has viewed Washington's business tax as the most regressive business tax of any state in the entire country that's because we're the only state that taxes gross receipts so even if you graduated and apply it to businesses with a large amount of gross receipts the incidence of that tax still falls for the most part on regular people who are buying the products that companies like Amazon and Microsoft and grocery stores are selling so again if we want to solve this the regressive nature of the St tax we can't but why isn't there a bipartisan effort and there have been plenty of you know work groups and task forces on this but why why don't Democrats and Republicans come together to replace the bno tax if it's so aggressive and not helpful you know I that I've been asking that question myself as well um I think there are some folks on both sides of the aisle that would like to do it uh you know there some entrenched interests that don't want it to change but but both sides agree it's not super useful for the modern era it seems a little surprising there's not more political will to do something about it yeah it it's it's a challenge for sure um you know but if if you're if you're restructuring it to make it a little more fair that that means that there could end up being folks that benefit but if it would also mean there's you know folks that would end up paying more under the new system even it is even if it is more fair and that's that's the political challenge that you quickly into trying to fix that problem well let's move on to some other issues I do want to briefly ask about the 1% cap on property tax increases I know local governments are pushing for that to be lifted uh you know inflation is 3% at best maybe 7% some years why why would we maintain that cap well first of all like I said with regard to the real estate excise tax you can't make housing more more affordable by making it more expensive um allowing the rate of property tax growth to Triple will definitely make housing more expensive if you um own your house and pay property taxes directly or or through a you know an escro account you're going to be bearing that cost yourself um but even if you rent and you don't you're not actually paying property taxes at somebody that gets wrapped that gets rolled up into your renting rental costs and you pay that as a tenant at some point um you know and and I will I not just starving local government by by restricting by putting that that throttle you know um I I've not been elected to local government obviously they've got they they've got a different budget situation than us they have different Revenue sources uh they have different spending obligations um you know but I I will note that the area I live in in South King County East Pierce County um is suffering from the consequences of land use decisions made by the state and the city of Seattle uh and so we are sort of the last Refuge of affordable housing uh that you can live in and still maybe sort of kind of hope to have have a job somewhere in Seattle or BW and and do that daily commute um so while most City Statewide might be supporting this change uh some of the cities in my neck of the woods are actually telling me no they they don't want to do this change because they know what it will do to housing costs in their community in our community um so that's what Republicans have been saying all along is that you know we got to care not just about funding local government services which is important to be sure but also making sure that people can afford to buy homes and stay in their homes and if their property taxes are growing a lot more rapidly that that'll really threaten the the housing affordability issue that we need to solve let me ask you about the other side of the LED and that's the spending Ledger I believe I read recently that Senator Wellman who chairs the Senate trans Senate education committee wants to put a billion dollars more into education there's always pressure on legislators to do that uh certainly generally for schools also for special ed we know there's schools who are struggling around the state uh school closures have been on the docket what what is your interest in and what do you think the capacity is to actually increase K12 spending I mean Republicans want um to fund Public Schools but we want more than that we we want to do more than just send money to the public schools we want public schools to produce better outcomes um I got elected in 2014 which was um about partway through the legislatures dealing of the MCCC lawsuit and related issues and since then the the amount of money uh spent on the you know count however you want to aggregate K12 spending as a percentage of the state budget um on a per people average basis any way you want to do it uh it went up from 2014 to to about 2018 2019 and it on a per people basis it's continuing to go up but if you look at at outcomes and results over that same period we're going in the wrong direction so I think Republicans are not at all opposed to investing in public schools to make sure we have top-notch teachers that are you know given world- class education to kids regardless of their zip code but we want we want to make sure we're getting results from that and simply sending more money to school without demanding any sort of accountability or results in return uh is just going to continue to repeat the same problems that have conf confronted us for the last decade um so if we want to if we want to spend more money into the K12 system we got to also get serious about making sure that there's something to show for all that that we have kids with better better literature rates better graduation rates better test what would that mechanism be with this with these dollars comes what well I think there's a lot of different ways you could do it um but I I I think that one of the challenges that you run into uh is the influence of the State teachers union uh who are very interested in the first part of that equation the the the more money coming in the door but a lot less interested uh in the second part which is the accountability um you could you know there's been ideas that are floating around you can have accountability on sort of a classroom or School building basis you can have accountability on a district basis um you know there's some really radical but perhaps increasingly needed Solutions around um School vouchers um it's very popular in a lot of Republican legislates yeah I I got I got a message uh from somebody that uh uh superintend public construction Chris reall was on on this show and apparently accused me of wanting to privatize schools which I didn't think that I did until I pulled out the statistics that his office publishes and looked at the trend of test scor since he became superintendent Public Instruction and suddenly realized hey maybe we should start talking about this because um allowing him to run system just taking money out of public schools and letting families take them to private or parochial schools doesn't that just starve the public school no I I don't think so I think it empowers the parent to make the choice that's best for their student um best for their child uh you know I said my kids to public school that that makes sense for us they they go to a great Public School in in the Auburn school district and they've got they've got wonderful teachers um you know but not everybody is as blessed to live in the same community that that I am uh not everybody is blessed with a a really good strong Public School uh District or or school near them and you know I don't think they ought to be punished because of that just cuz we're running out of time here I do I know housing affordability you've referenced it it's a top priority uh for you and for legislators across I think the aisle is there some and Republicans recently rolled out a a a batch of proposals for how to address this issue do you see any kind of bipartisan alignment this year on one or two ideas you know I I do um there's been some increasing by partisanship on the idea of a of supply side solutions to the problem um you know to get more building it turns out that the laws of supply and demand aren't this like rightwing University of Chicago Economist fever dream they really do describe how the world works and you know if you want to make something cheaper you can either make people want it less or you can make more of it um it's kind of hard to drive the demand for housing down uh so the only real solution is increase the supply of housing um we are really far behind uh we have the fewest number of housing units per household of any state in the country so we've got our work cut out for us there probably isn't a single Silver Bullet solution we need more housing of all kinds in all areas uh the legislature has made some strides in the last couple of years on that uh there's still plenty of more things we can do around the margins um couple bills this year are to allow make it easier to build uh adus and and you know second homes in in rural areas uh to allow home owners to divide their lot in uh into two uh to build an extra housing unit on the new lot so there's some ideas out there and I think that'll get some bipartisan support just lastly and briefly How concerned are you about the Trump administration's policies especially as they might affect this federal workers in the state and the state budget yeah you know we're we're keeping an eye on it but it it's early in the administration there's there's a lot going on there's a lot of commotion um I I was elected to solve was this Washington's problems uh not the country's problems so you know I'm I'm going to be prioritizing that and to the extent decisions out of the federal government make it harder to solve Washington's problems uh you know I I won't hesitate to speak out but um I'm also not going to light my hair on fire every time that you know somebody sends a tweet whether it's the president or one of the president's critics I'm going to wait to find out what the facts are and um you know what's real and what's not the courts are going to get a chance to weigh in on things that aren't legal and um we we got a great system of government we we've got process to work all this out um when when the time comes to protect washingtonians I'll I'll be there um you know but I'm I'm not gonna die in a panic either okay I'm gonna stop you there house Republican leader Drew stokesbury thanks for the interview