OLYMPIA — More than a dozen Senate Democrats want voters to reconsider their decision last November that makes it difficult for them to take state tax exemptions off the books.
On Thursday they unveiled a a new bill that would remove the requirement that both houses of the Legislature give a two-thirds majority to any plan to reduce or end a tax exemption. If it passes — a big “if” considering there are only 10 days left in the regular session and the bill has not yet been scheduled for a hearing — it would be put before voters this November for their approval.
While the days are running out for the regular session “there may be an opportunity in the special session,” Sen. Phil Rockefeller, D-Bainbridge Island, said.
The Legislature is still struggling with the general operating budget for 2011-13…
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and also has differing versions of the transportation and capital budgets for the next biennium. While legislative leaders have continued to say publicly they hope work can be completed on time, the work load to accomplish that gets more daunting every day.
Gov. Chris Gregoire, who said earlier in the week she was optimistic the Legislature would go home on time by mid-week was saying she was getting pessimistic.
The proposals introduced by Senate Democrats Thursday aren't needed to implement the general operating budget. If they were to pass voters' muster in November, any revenue they raise in the future would be applied to future spending.
Senate Democrats also introduced other bills targeting specific exemptions for large interstate banks, club membership dues, chicken bedding and artificial insemination of livestock, or to raise the rates on businesses that get preferential treatment. Some of those would also go before voters in November, if they manage to pass the Legislature.
The state doesn't offer a tax exemption for bedding for children, “yet we provide for chickens,” Sen. Tracey Eide, D-Federal Way, said.
Rockefeller also has a separate bill that raises any preferential rate a business or industry currently receives by 25 percent. He called it “a haircut, if you will.”
None of the bills would prevent the Legislature from passing some version of an “all-cuts” budget, but once that spending plan goes into effect, Rockefeller said, “voters deserve a chance to weigh in on that decision.”
Last year, voters approved Initiative 1053, which requires a two-thirds majority for “legislative actions raising taxes”, or a simple majority if the increase is approved by votes.
But Senate Democrats pushing the new legislation contend many voters didn't know that two-thirds majority extended to the repeal or revision of tax exemptions as well as to instituting new taxes or raising existing ones.
“I don't think the people knew that when they voted on 1053,” Sen. Jeanne Kohl-Wells, D-Seattle, said.
Republicans scoffed at that argument. I-1053 reinstated a 2007 voter initiative which the Legislature suspended early last year, and that earlier initiative for super-majorities on taxes applied to changes in tax exemptions as well.
“They understood quite well what they were doing,” Sen. Mark Schoesler, R-Ritzville, said. “I like to give the voters a lot more credit.”
Several of the tax exemptions the Democrats want to eliminate make good sound bites, but they have real purposes. A tax break on the sales tax for bull semen for the artificial insemination of cows is decades old, and is based on the fact that there's no tax on the purchase of a live bull, so it wasn't fair to impose it on frozen semen, a new technology at the time, he said. The tax break on chicken bedding is a recognition that people want to buy locally, but chicken farms in neighboring states aren't charged taxes for such supplies.
“Why are we punishing chicken farmers? Because it's a good sound bite,” Schoesler said.
And some of the Democrats calling for an end to current business tax loopholes proposed their own special exemptions this year, for everything from real estate firms to restaurants to film companies to zoos.