Rep. Eric Pettigrew, D-Seattle, confirms that his plan for a third-of-a-cent sales tax hike to offset deep budget cuts has collapsed. Proponents, including House Speaker Frank Chopp, have been unable to round up enough votes. “We looked at the vote count, and it didn’t look good,” said Pettigrew. How many votes, if he needed 50 to get it passed in the House? “I don’t even know if I got 30,” he said. “I’m very, very disappointed.” Pettigrew drew fire from Republicans for saying that “people will die” if some of the cuts to health care weren’t offset by the sales tax. It would have raised $1.1 billion over three years. “I definitely stand by that comment,” said Pettigrew. “I have no doubt in my mind.”

This is an idea that legislative advocates should have had weeks ago: The folks at the private Washington State Budget and Policy Center have put together a handy online calculator to estimate how much a person would receive if the state working families tax rebate becomes reality.

The rebate is a key part of a proposed third-of-a-cent state sales tax increase. To offset the impact for low-income families, many Democrats are insisting on a rebate. It would be patterned on the federal Earned Income Tax Credit. If you get that, you’d get an extra 5 percent from the state.

Writes the policy center’s Jeff Chapman:

For example, a married couple with two kids and $20,000 in wages would receive $251 dollars. A single parent with one child would receive $152. The minimum credit for those who are eligible is $25.

The sales tax plan, which would steer hundreds of millions of dollars into hospitals, nursing homes and other health services if voters agree, is struggling to find support in the House in the final days of the legislative session. Republicans and some conservative Democrats argue that in a consumer-driven recession, it’s unwise to increase taxes.

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.

Stuff’s moving quickly, so here’s a quick overview of recent developments, etc:

-The polling came back Friday on a proposed third-of-a-cent sales tax hike, and the numbers prompted an on-again, off-again Saturday, with groups and lawmakers weighing whether to press ahead with a public vote on the plan.

“We weren’t sure (the numbers) were strong enough to go forward,” said Cassie Sauer, who’s part of a coalition of health groups (hospitals, nursing homes, a nurses union, SEIU). She wouldn’t give out numbers, although she said that the number of people supporting a tax increase was higher than those opposed. And the numbers were “through the roof” as far as public disapproval of cuts to pediatric health, hospitals, nursing, etc. But many people are clearly very worried about the economy, she said.

So is the health coalition still willing to back a campaign to win public support for the temporary tax increase, which would add $1.1 billion over three years? “We’re thinking about it,” said Sauer.

-The Washington Policy Center’s Jason Mercier has posted two video clips, less than three weeks apart, in which a) Rep. Eric Pettigrew is praising the House budget as a responsible document and b) he says that the budget will result in people dying.

-David Goldstein, at horsesass.org, reports that momentum for an income tax on high earners is faltering: “`Next year,’ income tax advocates are being told. `Maybe next year.’ Yeah. Right.”

Goldstein argues that if ever there was a moment of opportunity for such a plan, it’s now. Not next year, when most House lawmakers will be running for re-election. Writes Goldstein:

By “next year,” of course, the powers that be mean “some other year,” which really means “never.”

-The Homeowners’ Bill of Rights has apparently died, for the third year in a row.

-With Senate Majority Leader Lisa Brown and Sen. Chris Marr standing in the House wings Friday, there was some high drama Friday night involving SB 5840, which was intended to ease some of the renewable-power rules for power companies, easing the cost to ratepayers. Environmentalists say the bill largely guts Initiative 937, which set those standards.

In a rare alliance, environmentalist House Democrats joined Republicans to pass an amendment that seems likely to kill the bill: declaring all hydropower renewable, which would largely render I-937 meaningless. From the Olympian’s Brad Shannon:

“We put a poison pill in it,” said Rep. Zack Hudgins, D-Tukwila, who voted for the amendment and then voted against the final bill.

TVW’s Niki Sullivan adds this: “It might be working: The Senate rejected the House’s amendments yesterday. It now heads to a conference committee.”

-The Seattle Times’ Jennifer Sullivan has an update on a proposal to privatize some child-welfare services. (The short form: it’s now a pilot project instead of the original sweeping reform.)

-Publicola’s Josh Feit has the blow-by-blow in the continuing tussle between education advocates over whether a bill redefining basic education. And here’s a long statement from House education chairwoman Rosemary McAuliffe, who calls the struggle over HB 2261 “one of the most difficult and bittersweet weeks in my time in our Legislature.”

-Lawmakers have agreed to defer $430 million in state pension payments.

-Lastly: lawmakers have, in fact, banned novelty lighters (those that could be mistaken for a toy or that have flashing lights) out of concern that they attract children who end up starting fires with them.

I’m sitting in the House hearing on a proposed .3 percent sales tax hike, HB 2377.

The proposal, from Rep. Eric Pettigrew, would raise just over $1 billion in three years. Much of that money would be steered into health care: mental health services, hospitals, nursing homes, public health programs and the state’s Basic Health Plan, which provides coverage for thousands of low-income folks. To offset the hit to low-income families, it would also send millions of dollars in state tax rebates back to people who qualify for the federal Earned Income Tax Credit.

The plan would only take effect if voters approve it in November.

The crowded hearing room is full of health care providers, officials and lobbyists representing nurses, hospitals, adult day health programs, public health, etc. They all support the plan as a critical lifeline.

A hospital official said that if the bill passes, hospitals will still see a state budget cut of $110 million over the next two years. Without it, that will be $350 million.

Dianse Sosne, with SEIU 1199 NW, said that proposed budget cuts would tear the state’s health safety net apart. That means mothers, babies, and elderly people ending up in emergency rooms, she said, and more mental health patients ending up in jails, prisons, under bridges and on the streets.

“And ultimately those costs will fall on taxpayers,” she said.

Among the few voices opposing the plan: anti-tax initiative promoter Tim Eyman.

Eyman blasted the proposal, saying that legislative budget writers are protecting non-essential state programs while asking voters to approve a billion-dollar tax hike to stave off cuts to people needing health care.

“Have you no shame?” he said.

“You are fooling no one,” he told lawmakers. “…The best thing you can do for the poor and the middle class is to stop taxing them to death.”

Pettigrew and many of the advocates will hold a press conference about the proposal later this morning.