Transcript Highlights:

• Thank you for adding that, Rep. Simacek.
• Thank you for adding that, Rep. Simacek. Okay, let's go to HB 2751, Holly.
• and housing tax credit, think rural LIHTC, that is established through 2036.
• county from raising a tax, fee, or utility...
• qualified facilities tax credit program in rural locations of Arizona.

Summary: The caucus reviewed a long calendar of House bills across education, health, water, land, housing, labor, public safety, and taxation. Several measures dealt with artificial intelligence, including bills on AI disclosures for minors, AI-assisted divorce arbitration, an Arizona AI education program, AI privilege protections, and a required AI course in schools. Other topics included ESA administration funding, a prohibition on public money for certain foreign-controlled genetic sequencing devices, towing regulations, DUI and ignition interlock changes, health facility and nursing facility complaint timelines, internationally trained physicians, nurse anesthetist reimbursement, pharmacy penalties, childhood cancer research, cybersecurity encryption, school mental health instruction repeal, superintendent performance pay, adoption disclosures in student health settings, anti-Semitism in schools, and a range of water, land, and housing bills. Members frequently raised concerns about local control, unfunded mandates, constitutional issues, and the scope of state intervention. Several bills drew criticism for affecting school curriculum, public education, reproductive rights, protest activity, or tribal communities. Others were supported as technical fixes, consumer protections, or funding measures. The caucus also discussed a series of bills related to the Mexican gray wolf, state land management, solar and wind siting, groundwater transport, and rural development, with some members objecting that the proposals would undermine federal protections or tribal interests. A number of bills were pulled from consent for further discussion, including HB 2020, HB 2957, HCR 2044, HB 2352, HB 2667, HB 2906, HB 2093, HB 2386, HB 2481, HB 2830, HB 2076, HB 2411, HB 2136, HB 2665, and HB 2904. The meeting ended with an announcement of the Latino Caucus guest presentation and an emotional tribute to Reverend Jesse Jackson, followed by presentation of an Affordability Award to Representatives Lorena Austin and Stephanie Simacek for work on economic justice and working families. The caucus then adjourned.

Transcript Highlights:

• Because we added that in, Mr. Chairman.
• The ADE is underpaid.
• They added those licenses.
• That's the point of the historic property tax incentive, just like we have other tax incentive programs
• That's the point of the historic property tax incentive, just like we have other tax incentive programs

Bills: SB1041 , SB1088 , SB1118 , SB1128 , SB1168 , SB1176 , SB1189 , SB1207 , SB1250 , SB1272 , SB1274 , SB1286 , SB1428 , SB1457 , SB1461 , SB1503 , SB1519 , SB1537 , SB1582 , SB1618 , SB1654 , SB1713 , SB1827 , SCR1012 , SCR1020

Committees: House Appropriations , House House Appropriations Committee of Reference

Keywords: electronic monitoring, nursing care, assisted living, resident rights, privacy, consent, surveillance, cybersecurity, homeland security, artificial intelligence, state appropriation, VPN security, zero trust, housing, zoning, middle housing, urban development, duplexes, triplexes, fourplexes

Transcript Highlights:

• We're adding an immigration federal assistance component.
• , their parents have paid taxes, for them to pay the same...
• I don't know. ...who have paid taxes, their parents have paid taxes, for them to pay the same fee for
• Educated workers contribute more in taxes, boosting the state's revenue.
• We give them added responsibility.

Committee: Senate Appropriations

Summary: The Senate Appropriations Committee took up SB 2-C, a major immigration enforcement bill sponsored by Senator Gruters and co-introduced by Senator Fine. Gruters described the measure as a broad crackdown on illegal immigration that would replace a single immigration officer with a State Board of Immigration Enforcement, create a $250 million grant program for local law enforcement, fund additional Department of Agriculture interdiction staff and facilities, expand pretrial detention for certain unauthorized immigrants, increase criminal penalties, require more cooperation with ICE, and eliminate in-state tuition eligibility for undocumented students. He and supporters framed the bill as a way to support law enforcement, deter illegal immigration, and align Florida with federal enforcement efforts. Committee questioning focused heavily on the bill’s education, detention, and enforcement provisions. Senators pressed Gruters and Fine on why the bill did not address employer sanctions or E-Verify, whether the tuition changes would affect students who had grown up in Florida, how sanctuary-policy enforcement would work, and whether the bill would create practical burdens for prosecutors, jails, and local officials. Gruters said he was open to working on E-Verify in regular session but not to amending this bill, and Fine argued the tuition repeal would apply to undocumented students who had qualified under existing law. Sheriff Bob Gualtieri testified in support, saying ICE bed capacity was still insufficient and that county jails needed more resources to honor detainers. Mark Schlachman of FSU Law offered historical context, noting prior state-federal cooperation efforts and warning of unintended consequences, while several public witnesses opposed the bill as unconstitutional, costly, and harmful to immigrant families and the economy. Opponents from the Southern Poverty Law Center, ACLU of Florida, Florida Center for Fiscal and Economic Policy, Florida Policy Institute, AFL-CIO, and immigrant advocacy groups argued the bill would invite litigation, encourage racial profiling, harm the workforce and higher education, and punish law-abiding immigrants and their families. They emphasized that immigration is a federal matter, that K-12 education must be provided regardless of status, and that removing in-state tuition would reduce access to college and hurt Florida’s economy. Some speakers urged the committee to grandfather current students if the tuition waiver is repealed. The meeting ended with continued public testimony and no final vote reflected in the transcript provided.

Transcript Highlights:

• The amendment repeals two taxes: the business rent tax, beginning October 1, and the aviation fuel tax
• The amendment repeals two taxes: the business rent tax, beginning October 1, and the aviation fuel tax
• The amendment repeals two taxes: the business rent tax, beginning October 1, and the aviation fuel tax
• tax exemptions?
• But I don't know that having a sales tax holiday... ...was added in this version of it I find personally

Summary: The House met on the final day of session, swore in Representatives Boyles and Hodgers, and observed a moment of silence for the Minnesota House Speaker Melissa Hortman and her husband, as well as for Representative Rosenwald’s father. The chamber then moved into final budget work, with leaders outlining the plan to take up H.J.R. 5019, HB 7031, HB 5017, HB 5015, and then the general appropriations act once the Senate transmitted it. H.J.R. 5019, a proposed constitutional amendment to expand the budget stabilization fund, was explained and amended to raise the rainy day fund cap, require annual deposits, and allow withdrawals for critical state needs by a two-thirds vote; it passed 100-1. The House then adopted the conference report on HB 7031, the tax package. The bill repeals the business rent tax and aviation fuel tax, delays the natural gas fuel tax, creates or expands several sales tax holidays and exemptions, including permanent exemptions for disaster-preparedness items, hunting/fishing/camping items, and ammunition and firearms-related purchases, and makes changes to property, corporate income, local tax, and economic development provisions. Members debated the removal of recurring housing trust fund and transit-related revenue streams, the new ammunition exemption, and the data center tax changes; supporters argued the package reduces taxes and preserves annual budget flexibility, while opponents raised concerns about housing, transportation, and gun violence. The conference report passed 93-7. HB 5017, creating a debt reduction program funded by a recurring transfer to retire state bonds early, passed unanimously. HB 5015, the state group insurance conforming bill, which directs DMS to develop a formulary management plan and codifies the administrative health insurance assessment, also passed. The House then began explanation and questions on the fiscal year 2025-26 general appropriations act, described as a $115.1 billion budget that is down $3.8 billion from the current year and includes more than $12 billion in reserves. Subcommittee chairs summarized major spending areas, including pre-K-12 funding increases, health care funding for Medicaid, KidCare, nursing homes, opioid treatment, and mental health, transportation and economic development funding, environmental and water projects, higher education, state administration, justice, and information technology. Questions focused on school vouchers, inflationary pressures on school districts, and the adequacy of funding for housing, transportation, and other priorities.

Transcript Highlights:

• So they've done very well with property taxes.
• Okay, so if that occurs, I would be sending my tax, or the state's tax dollars, would be following myself
• I would be sending my tax, or the state's tax dollars, would be following my son to that school.
• lot of other states, to public schools via property taxes.
• Preservation Tax Credit Program.

Summary: The House opened with prayer, the Pledge of Allegiance, approval of the prior day’s journal, and numerous introductions of visiting groups and guests, including schoolchildren, Republican women’s organizations, county commissioners, and family members of legislators. Members also suspended House Rule 98 to allow baseball apparel in celebration of opening day, with the motion passing 118-22. The chamber then took up the state budget bills. House Committee Substitute for House Bill 2002, covering elementary and secondary education and child care, drew the most debate. Supporters said it maintained record funding for the foundation formula, transportation, and early childhood programs, while critics argued it still fell short of fully funding the formula and underfunded child care subsidies by about $51 million. After extended debate over statutory obligations, school funding, and child care policy, the bill passed 85-70. House Committee Substitute for House Bill 2003, the higher education and workforce development budget, also prompted substantial debate over a proposed shift to an FTE-based funding model for colleges and universities. Supporters called it a fairer, more equitable system that follows students and encourages efficiency, while opponents warned it would sharply reduce funding for some institutions, including community colleges and regional universities. The bill passed 83-66. The House then passed House Committee Substitute for House Bill 2004, covering revenue and transportation, 91-50, despite objections over a public transit cut and constitutional concerns raised about MoDOT appropriations. House Committee Substitute for House Bill 2005, the Office of Administration and employee benefits budget, passed overwhelmingly after members discussed state worker compensation, deferred compensation, and benefits funding. House Committee Substitute for House Bill 2006, covering agriculture, natural resources, and conservation, passed 133-17 after members highlighted restored funding for agriculture business development and food insecurity grants, while others criticized cuts to natural resources and parks funding. The chamber then moved on to House Committee Substitute for House Bill 2007, covering economic development, commerce and insurance, and labor and industrial relations, with the budget chair introducing the bill and outlining its major departmental appropriations.

Transcript Highlights:

• tax unlike income tax because the sales tax unlike income tax and<00:42:40.480><c> corporate</c><00:
• </c> tax uh and many residents will see a tax tax uh and many residents will see a tax cut<00:53:53.880
• </c> that are are tax exempt in the tax that are are tax exempt in the tax expenditure<01:10:43.679><
• state sales tax, but your county sales taxes, the new housing sales tax, the local sales taxes—so all
• state sales tax, but your county sales taxes, the new housing sales tax, the local sales taxes—so all

Committee: House Taxes

Transcript Highlights:

• ><c> that's</c><00:08:58.399><c> just</c><00:08:58.560><c> a</c> tax dedications and that's just a tax
• Your combination Kentucky, uh, because we've had income tax, a sales tax, property tax, other kind of
• </c> had income tax, a sales tax, property had income tax, a sales tax, property tax,<00:53:25.839><c
• ><c> we've</c><00:53:27.040><c> had</c> tax, other kind of taxes, we've had tax, other kind of taxes,
• </c><00:59:33.119><c> So</c><00:59:33.359><c> now</c> income tax. So now income tax.

Summary: The committee met to hear a presentation from Dr. Hicks on the governor’s recommended budget for the next biennium. He reviewed the revenue outlook, noting modest general fund growth, a large rainy day fund balance, and the impact of recent income tax reductions. He said the budget was built around recurring reductions, lower debt service and retirement contribution rates, and the use of excess restricted funds, while protecting K-12 education, Medicaid, postsecondary education, public safety, and pension obligations. Dr. Hicks outlined several major spending and reserve proposals, including $350 million from the Department of Insurance’s excess restricted funds to support Medicaid in the first year, $150 million for the affordable housing trust fund, $125 million for rural hospitals, $100 million to offset lost federal ACA premium tax credits, $75 million for utility assistance, and $50 million for food assistance. In education, the proposal included a phased pre-K for all plan funded by sports wagering tax revenue, a 3% annual salary increase for full-time school personnel, continued full funding of teacher pensions, a 2.5% annual increase in SEEK base funding, and additional support for career and technical education and school facilities. He also discussed Medicaid cost pressures, including higher managed care, pharmacy, behavioral health, and nursing facility costs, and explained the expected effects of federal HR1 changes on Kentucky’s Medicaid program. Those changes include work and community engagement requirements and more frequent eligibility redeterminations for expansion members, which the administration estimated would reduce enrollment by about 4,300 in the first year and 28,000 in the second year. No votes or formal committee actions were taken during the meeting, which was limited to the budget presentation and member questions.

Transcript Highlights:

• a tax and does not violate any anti-tax pledges.
• prevent the burden of an income tax being added to our taxpayers now and forever?
• Would I now press the green button and prevent the burden of an income tax being added to our taxpayers
• </c> prevent the burden of an income tax prevent the burden of an income tax being<04:22:50.479><c> added
• . taxes. taxes.

Transcript Highlights:

• We added a few clarifying things. I think the things that we added were very good.
• So this being a tax credit is really a high... Just even become profitable.
• So this being a tax credit is really a high burden or high hurdle to get.
• And this tax credit expires, say, within 10 years.
• We're adding extra capacity to where there was already high capacity.

Committee: House Commerce, Consumer Protection, Energy and the Environment

Summary: The committee first called the roll and established a quorum, then heard Senate Bill 1553, sponsored by Senator Curtis Gregory. The bill is aimed at reshoring critical supply chains to the United States through tax credits and related incentives for production of pharmaceuticals, critical minerals, materials, and metals. Gregory said the Senate version added clarifying language tying eligible materials to federal critical-materials and FDA lists. Witnesses in support described the bill as a national security measure and an economic development tool for Missouri, citing dependence on China and India for medicines and materials, forced labor concerns in cobalt supply chains, and examples of Missouri companies and institutions already working in pharmaceutical and mineral production. Several supporters noted the bill’s incentives would be difficult to use without additional federal support, and one witness said the transferable tax credits were a key strength, though the scope could be narrowed in the future. Support testimony came from Douglas Jost of Jost Chemical Company, Jared Hankinson of the Missouri Chamber of Commerce and Industry, Matt Thompson of the API Innovation Center, Michael Givens of Doe Run Company, and Matthew Smith of Associated Industries of Missouri. Their comments emphasized supply-chain vulnerability, national security, and Missouri’s existing manufacturing base. No opposition or informational testimony was presented, and there were no substantive questions after the witnesses. The committee then moved into executive session and voted unanimously, 9-0, to report Senate Bill 1553 do pass.

Transcript Highlights:

• </c> go directly into the highway user tax go directly into the highway user tax fund.<00:16:00.639><
• Oh, tax distribution fund. Sorry. fund. Oh, tax distribution fund. Sorry.
• He presented two bills this morning and added to a great conversation we had in Taxes this morning.
• Houdin. they will take a look at an added value they will take a look at an added value of<00:23:48.080
• So kind of adding to uh the affected.

Committee: Senate Transportation

Transcript Highlights:

• And there is not a highway tax.
• Actually, you'd be charged with probably tax evasion because you're skirting around the road tax that
• Therefore, you need to pay that back taxes. So it's a penalty or fine, back taxes, whatever.
• taxes, is what it ended up being.
• , the motor fuel tax.

Committees: House Agriculture , House Agriculture, Food Production and Outdoor Resources

Transcript Highlights:

• You said excise tax, but that would be a 33% excise tax.
• </c> excise tax.
• Is that what the excise tax excise tax.
• We added a rail.
• </c> of of tax rates. of of tax rates.

Committee: Joint Select Committee on Gaming

Transcript Highlights:

• Some states use oil and severance taxes. Some states use sales taxes.
• So you have the same issue with the ZEV fuel tax as you do with a gas tax.
• So while it's not technically a tax, it's still taxing.
• Unless the gas tax is actually repealed, we're talking about a second tax.
• That's the gas tax.

Committee: House Transportation

Summary: The Assembly Transportation Committee first took up three highway memorial naming resolutions on its consent calendar: ACR 109, SCR 78, and SCR 90. The committee approved the consent calendar on an 11-0 vote, with the roll not held open. The chair also recognized committee science fellow AJ Mendeola for his service before adjourning the bill-hearing portion and moving to an informational hearing. The informational hearing focused on alternatives to the gas tax and how other states are responding to declining fuel-tax revenue. A first panel of researchers and policy experts described the erosion of gas-tax receipts due to inflation, improved fuel efficiency, and growth in electric vehicles, and compared options such as EV registration fees, kilowatt-hour charging fees, delivery fees, transportation network company fees, managed lanes, and road usage charges. Witnesses generally said road usage charges best preserve the user-pays principle, but they also emphasized that implementation costs, privacy concerns, and public understanding remain major obstacles. Committee members raised concerns about fairness for commuters, low-income drivers, and EV adoption, while some members argued a mileage-based system could amount to a new tax unless the gas tax is actually repealed. The second panel featured state officials from Hawaii, Utah, Oregon, and Virginia describing their programs. Hawaii said it launched its road usage charge program on July 1, 2025, using existing safety-check and registration systems, with EV owners initially choosing between a per-mile charge and a flat annual fee before mandatory EV participation begins in 2028 and a broader transition plan is due by 2026. Utah described its voluntary EV road usage charge program, annual flat fee option, quarterly reporting, privacy protections, and recent cost reductions as enrollment grows. Oregon began outlining its structural funding challenges and constitutional cost-responsibility framework, while the hearing overall underscored that states are experimenting with different approaches but have not settled on a single replacement for the gas tax.

Transcript Highlights:

• And in the tax space, NCSL has found there are 38 states that offer a dedicated tax exemption or tax
• Tax incentive.
• So ultimately, what Virginia settled on was keeping the current data center tax exemption, but adding
• So ultimately, what Virginia settled on was keeping the current data center tax exemption, but adding
• tax and use tax exemption from an economic development perspective.

Summary: The committee met to review its interim schedule and then focused on a referral regarding political subdivision compliance with state law, especially levy limitations and reserve levels. State Auditor Josh Gallion explained the audit process, the Yellow Book standards, and key statutes governing political subdivisions, including the 75% cash reserve cap and mill levy limits. He said the auditor’s office has limited authority to force compliance, has only stepped in a couple of times to resume audits for fiscal irregularities, and is constrained by staffing shortages and a backlog of local government audits. Gallion used Stark County and Mountrail County as examples to show how reserve calculations affect levy decisions. He said Stark County’s 2023 general fund levy calculation should have been zero under the statute, but the county still levied mills, while Mountrail County had recently reduced or eliminated some county levies after building large reserves. Stark County Commission Chair Neil Messer responded that the county chose not to move excess funds into a capital projects fund because it wanted flexibility for future projects and emergencies, and said the county has since reduced its levy and committed reserves to major projects such as road work, a regional airport, and public safety facilities. Committee members questioned whether penalties should apply to auditors or elected officials and whether the statutes should be updated to reflect current revenue conditions. Association of Counties director Linda Svihovec and League of Cities director Matt Gardner both said they have been heavily training local officials on the new 3% property tax cap and reserve rules. Svihovec said the association has held dozens of training sessions and that the standard worksheets used statewide are designed to help counties comply; she suggested that a possible enforcement tool could be requiring an affidavit from taxing districts certifying compliance with the cap. Gardner said city auditors receive required training through the League of Cities and that he was unaware of any cities currently out of compliance. The committee took no formal action and indicated it would continue the discussion at its September 29 meeting, with members asked to review the legislative council memo on possible enforcement mechanisms and statutory changes.

Transcript Highlights:

• This will facilitate collection of unpaid taxes.
• A $7.3 billion tax deserves careful and transparent review, especially... $1.3 billion tax deserves careful
• notion that it's going to actually increase the tax.
• This is a continuation of a tax.
• That we're not going to be increasing their taxes.

Transcript Highlights:

• of her employment taxes and her enterprise taxes.
• any state tax, which includes all of the excise taxes... ...sales tax?
• the local sales taxes in Illinois and the regional sales taxes.
• tax yeah it's any state tax which includes all of the excise taxes in the state of Illinois and all
• We've got the state sales tax and we've got a local option sales tax on meals.

Summary: The Special Commission on the future of payments and sales transactions by credit card heard extensive testimony from credit union, banking, retail, restaurant, and payments-industry representatives about proposals to limit interchange fees, especially on the tax and tip portions of transactions. Several witnesses opposed state-level restrictions, arguing they would create a patchwork of rules, burden state-chartered institutions, raise compliance complexity, and ultimately reduce resources for fraud prevention, cybersecurity, rewards, and access to credit. Others, including retail and merchant advocates, said swipe fees are a significant and growing cost for small businesses and that states should consider reforms such as limiting fees on taxes and tips, allowing surcharging, improving transparency in merchant contracts, and studying collection costs more closely. Witnesses also discussed recent legal and regulatory developments, including Illinois’s interchange-fee law, OCC and NCUA interim rules, and the ongoing Visa/Mastercard antitrust settlement. Industry representatives said the Illinois law has been delayed and is likely preempted for most transactions, while merchant advocates argued the state efforts and court rulings show that networks and banks do not set fees competitively. The proposed antitrust settlement was described by some as a meaningful but limited merchant victory, with temporary fee reductions and expanded surcharge/steering rights, while others said it still falls short of structural reform. The commission members pressed witnesses on the practical effects of fees, the cost of cash, whether merchants can pass costs through, and whether small businesses are actually seeing benefits from the current system. Members repeatedly emphasized the need for a fair middle ground that protects both small businesses and the payment system. No substantive votes or policy actions were taken beyond accepting testimony, and the meeting ended with adjournment after all scheduled witnesses had spoken.

Transcript Highlights:

• I want to be very clear: AB 1421 does not impose a new tax or a fee.
• and diesel tax structure that supports all of our multimodal transportation improvements.
• He added that electric vehicles have been getting off tax-free for quite some time, so it is time to
• while adding a vehicle usage charge for zero-emission vehicles, and whether that is a possible path
• He asked whether the Legislature could maintain the gas tax for gas vehicles while adding a vehicle usage

Committee: House Transportation

Transcript Highlights:

• filings is November 15th, as it currently is for their federal tax filings.
• filings is November 15th, as it currently is for their federal tax filings.
• filings is November 15th, as it currently is for their federal tax filings.
• filings is November 15th, as it currently is for their federal tax filings.
• </c><00:20:50.240><c> reporting</c> section seven um added reporting section seven um added reporting

Summary: The Appropriations and Revenue Committee took up several House bills and committee substitutes. House Bill 2, as amended by Senate Committee Substitute 1, was described by Rep. T.J. Roberts as restoring a tax exemption enacted in 2024 by providing refunds with interest to those improperly taxed and creating a cause of action; the substitute also aligned state filing deadlines for certain flood-disaster counties with the federal November 15 deadline. The committee adopted the substitute and then passed the bill with favorable expression. The committee also adopted a title amendment for House Bill 544, which Rep. Jason Petrie said was part of the state’s flood-relief discussion and would allow the guard cap to be used over the biennium rather than annually, effectively increasing the cap from $50 million per year to $100 million over two years; the measure passed with favorable expression. House Bill 552, handled by Rep. Josh Bray after Rep. Kim King’s absence, was described as simplifying tourist commission appointments. The committee substitute added creation of the Kentucky-Ireland Trade Commission and changed marina licensing agreements by exempting private contractors from the model procurement code. The committee adopted the substitute, approved a title amendment, and passed the bill with favorable expression. House Bill 605, sponsored by Rep. Kim King, clarified which grants qualify for a grant program and allowed cities or counties to apply on behalf of water districts or other entities not directly affiliated with them; Rebecca Hearts of Grant Ready Kentucky said the program had matched $103 million of the $200 million allocation, generating about $469.98 million in total project value. The committee adopted the title amendment and passed the bill with favorable expression. House Bill 606, by Rep. Wade Williams, added a capital-oversight reporting requirement for school district general obligation bonds that had been omitted from prior legislation. The committee substitute also made several budget and program adjustments, including moving Regional Training Center funds, accelerating funding for the Grand Lyric Theater, correcting water funding language, removing Odyssey Inc. language from a treatment-related item, fixing a double appropriation to LifeWorks Transition Academy, clarifying carry-forward language, allowing SRO reimbursements for public and non-public schools, and authorizing an additional $10 million in agency bonds for Western Kentucky University athletic facilities. The committee adopted the substitute, approved a title amendment, and passed the bill with favorable expression. The committee then spent the most time on House Bill 695, a Medicaid-related bill. Rep. Adam Bowling said the bill was intended to stabilize Medicaid, create oversight and advisory mechanisms, and address growth in the program. Cabinet for Health and Family Services Secretary Eric Friedlander and Medicaid CFO Steve Beckle said they were generally supportive of the transparency and reporting changes but flagged risks, including federal compliance concerns, budget growth from changing the drug rebate treatment, administrative costs tied to MCO rebidding and a managed long-term services study, and some data-collection challenges. Representatives from the Kentucky Association of Healthcare Facilities opposed the section calling for a managed long-term care reimbursement study, arguing it would be costly, duplicative, and likely ineffective, and they warned against managed care models for long-term care. Despite the concerns, the committee adopted the committee substitute by voice vote and moved the bill forward with favorable expression.

Transcript Highlights:

• So this would maintain the tax preference for sales tax exemption for when a new data center is built
• So this would maintain the tax preference for sales tax exemption for when a new data center is built
• There's simply this insatiable tax appetite. There's simply this insatiable tax appetite.
• in the nation, and proposals like a payroll tax or a millionaire's income tax will only accelerate job
• in the nation, and proposals like a payroll tax or a millionaire's income tax will only accelerate job

Summary: The House Appropriations Committee opened with committee guidelines for the 2026 session, including limits on testimony, amendment deadlines, confidentiality expectations, and professionalism rules. Chair Ormsby also reviewed housekeeping for the public hearing, noting the meeting was recorded and live streamed, and that testimony would be limited to one minute because of the large number of sign-ups. The committee then began its work session on Governor Ferguson’s proposed 2026 supplemental operating budget, presented by OFM Director Katie Chapman, who outlined the state’s fiscal pressures: higher caseloads in major programs, a revenue forecast decline of about $390 million, federal policy changes tied to H.R. 1, inflation, and a relatively small ending fund balance. She said the governor’s budget solves about a $2.3 billion shortfall through nearly $800 million in spending reductions, revenue shifts, fund transfers, use of about $1 billion from the Budget Stabilization Account, and some tax preference changes, while also making targeted investments in areas such as child welfare, behavioral health, wildfire response, housing, and IT modernization. Chapman also explained that the proposal does not fully balance over the four-year outlook under the state’s statutory assumptions, but said the governor relied on the budget-balance law’s exception tied to BSA use and low employment growth. A question from Rep. Connors about credit ratings was answered with the view that the impact is difficult to predict and that Washington’s strong pension funding and balanced-budget framework remain positives. The public hearing drew testimony from state officials and many advocates, most of whom opposed specific cuts or fund shifts in the governor’s proposal. Secretary of State Steve Hobbs objected to proposed sweeps from the corporations and charities fund and the library archives account, citing prior cuts, layoffs, cyberattack-related costs, and the need to upgrade aging systems. Commissioner of Public Lands Dave Upthegrove urged restoration of wildfire prevention funding, saying the proposed amount was still $30 million short of the commitment in House Bill 1168 and that underfunding would increase suppression costs and risk to communities. Many education witnesses opposed reductions to Working Connections Child Care, transition to kindergarten, local effort assistance, Running Start, and higher education across-the-board cuts, arguing they would harm access, equity, and workforce development. Higher education leaders from community colleges, the University of Washington, Western Washington University, and Evergreen State College described staffing cuts, program reductions, and pressure on student services, while K-12 groups and OSPI said the budget would deepen existing funding gaps. A large portion of testimony focused on human services, health, housing, and civil legal aid. Child welfare and youth-serving organizations supported some targeted investments but opposed cuts to child care, child welfare network administration, and youth programs; advocates for foster youth, homeless youth, and mentoring programs asked for continued or increased funding. Health care and long-term care providers warned that proposed Medicaid and rate changes would reduce access for seniors, people with disabilities, and safety-net patients, while Planned Parenthood and abortion access advocates urged full restoration of the Abortion Access Project and related reimbursements. Housing and legal aid witnesses backed the governor’s proposed right-to-counsel funding but asked for more support, and homelessness advocates sought contingency funding for federal housing programs. Crime victim and domestic violence service providers repeatedly said the proposed $12 million was far short of the roughly $21.38 million needed to avoid service cuts and closures. Other testimony addressed the Climate Commitment Account shift for the Working Families Tax Credit, with environmental advocates opposing the diversion of CCA dollars and workforce advocates supporting the governor’s economic security and employment programs. No votes or formal committee action were taken during the hearing portion described in the transcript.

Transcript Highlights:

• </c> House Taxes Committee. House Taxes Committee.
• I primarily staff property taxes and mining taxes.
• I'm the other fiscal analyst that staffs mainly income tax, sales tax, and other state taxes.
• <c> tax</c><00:49:56.480><c> let's</c><00:49:56.880><c> tax</c> agreement says let's tax let's tax agreement
• Let's tax let's tax or individuals. Let's tax let's tax them. them. them.