Eye On Olympia

TUESDAY, APRIL 21, 2009, 2:42 P.M.

Sales tax bill clears committee…barely…

A proposed billion-dollar sales tax hike barely cleared its first committee Tuesday, 8 votes to 7.

"We are at a time when people need our help," said Rep. Eric Pettigrew, D-Seattle, urging lawmakers to support his plan. "The most vulnerable need us."

If the House and Senate also approve, the proposal will appear on ballots in November for a statewide vote.

Republicans blasted the plan, saying Democratic budget writers should be scrubbing the budget more.

Rep. Joe Schmick suggested, for example, cutting state employees pay 2 percent or 3 percent, or by having them pay more than 12 percent of the cost of their health coverage.

"I'm here to tell you that Washington is hurting," said Schmick, R-Colfax. "And they're hurting because they're overtaxed and they're over-regulated."

The proposed sales tax increase _ which works out to 3 cents on a $10 purchase _ would partly undue millions of dollars in looming budget cuts to hospitals, nursing homes and other health services.

"We have really gone over this budget," Rep. Eileen Cody, D-Seattle, told Schmick. Sending the sales tax to voters, she said, gives the public a chance to undue some of the most serious cuts that lawmakers had to make.

Pettigrew noted that lawmakers weren't voting to raise the tax, just to send it to voters to decide.
"It's part of our effort to maintain our partnership with the public," he said.

To offset the effect of the tax on the state's poorest residents, the measure would also give a tax rebate averaging $100 to people who qualify for the federal Earned Income Tax Credit. This year, a family of four earning up to $43,415 would qualify. (NOTE: The amount of these rebates, however, was reduced from an earlier version of the bill, in order to steer millions of dollars more into the Basic Health Plan, mental health programs, vision/hearing services, and other health programs. The liberal Washington State Budget and Policy Center's Schmudget blog has an excellent breakdown on the numbers before and after.

Some Republicans argue that the plan isn't fair.

"You're going to be taxing middle-income families struggling to get along and giving that money to lower-middle-class families," said Rep. Doug Ericksen, R-Ferndale.

Rep. Mark Miloscia, D-Federal Way, crossed party lines to vote against the plan.

"I believe we are in the crisis of our generation and we are going to be judged on how we respond with real solutions," he said.

Pettigrew said he agrees that sales tax, which hurts low-income people the most, is not ideal. But he said that lawmakers have few alternatives in the face of devastating cuts.

"When we go back to folks, I want to make sure I can look them in the eye...and say I've done everything possible to help you," he said.




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