OLYMPIA — The Senate recessed Saturday afternoon without voting on their major tax package,  after more than four hours of contentious, and occasionally heated debate..

Democrats were one vote shy of the constitutional majority they need to pass the bill because one member Sen. Paull Shin, had to leave to attend a funeral.

OLYMPIA — A move to put the tax package on the ballot in November is proposed by Republicans.

Sen. Janea Holmquist, R-Moses Lake,said the package should be called “the kitchen sink bill…As in sink Washington.” A recent poll says people overwhelmingly think suspending Inititiative 960 was wrong thing to do. Eliminating the emergency clause and holding off on any taxes until voters have a chance to say yes or now would mean they would “Stop telling the working taxpayers just be quiet and pay up.”

Sen. Don Benton, R-Vancouver, called the bill a massive tax increase, repeating the refrain that it is “the largest tax increase in the history of the state of Washington.” Citizens have a right to have a say, he added. The state’s was founded by pioneers who came West and weren’t happy about the governments they left behind. They included the right of referendum and initiative, because they were afraid of measures just like this one.

“They knew how dangerous and tyrannical a government can be,” Benton said.

Sen. Rodney Tom, D-Medina countered: “If you like the budget vote for it. If you don’t like it, don’t vote for it. Don’t build budgets around referendums.”

Sen. Ken Jacobsen, D-Seattle, corrected Benton on his history: Initiative and Ref wasn’t initally in the state constituion, it was added in 1912 or 1913.

The tax increase is not the largest in state history, Sen. Lisa Brown, D-Spokane said. That honor belongs to a $1.1 million tax increase in 1981…when the Legislature was controlled by Republicans.

The measure fails 20-26.

OLYMPIA — Sen. Joe Zarelli suggests an incentive to make sure the temporary sales tax temporary.

If it doesn’t go away in 2013, legislators don’t get their per diem.

Sen. Rodney Tom, D-Medina, says in “the spirit of bipartisanship” he was supporting the amendment, even though he doubts it will change Republicans idea on the tax package.

Passes on a voice vote, apparently unanimously.

OLYMPIA — This is the biggie, the three-tenths of 1 percent increase in the sales tax for the next three years.

Sen. Janea Holmquist, R-Moses Lake, says Democrats are always saying the sales tax is the most regressive, and yet they want to raise its. She also doubts it will be temporary: “I’d love to see a show of hands on who believes that. I’ve never seen a temporary tax.”

Sen. Lisa Brown, D-Spokane: This is temporary and I do believe it’s temporary. It’s small, 30 cents if you spend $100.” It also expands the workingn families credit for low income families, so most of them will be better off.

It’s also the general public’s contribution to “more state patrol on the roads, more public services. Those essential public structures…to improve the quality of life for our citizens.”

Sen. Mark Schoesler, R-Ritzville: “I don’t look at this as contributions. These are taxes that employers will be paying, that make it more difficult to raise salaries or benefits or hires. I’d call it the Idaho Economic Development Act. Three-tenths of a cent is real money when you’re buying construction equipment, when you’re buying farm equipment.”

Sen. Cheryl Pflug, R-Maple Valley: “It isn’t just a third of a cent, it’s another third of a cent.”

Holmquist amendment to drop the sales tax increase fails on a voice vote.

An amendment to raise the sales tax by a full percent is withdrawn.

OLYMPIA—Republican offer an amendment to strip out an increase to the business and occupation tax on service businesses.

The Senate Democrats’ proposal raises the current rate of 1.5 percent on gross receipts to 1.75 percent on one of the largest categories of businesses.

How big? Sen. Joe Zarelli, R-Ridgeview begins reading from the state manual:Accounting, actuarial, appraisers, architects, beauty salons, sales person, comp services, dentists orthodontist, graphic design…

Sen. Rodney Tom, D-Medina, said this is part of an attempt to spread the burden of the tax increase around. The general public pays a little more, businesses pay a bit more.

But the state is also doubling the small business tax credit, Sen. James Hargrove, D-Hoquiam says.

Amendment fails 20-27.

Democratic Sen. Kevin Ranker offers an amendment to remove real estate brokers and agents from the increase in the B&O tax.

That’s not consistent, Zarelli argues. Why pull out one profession?

Amendment fails on a voice vote.

OLYMPIA — Republicans try to strip out a provision that puts the state sales tax on bottled water.

Sen. Mike Carrell, R-Lakewood, says previous debates have been “pretty esoteric” about things “that really don’t direct the lives of individuals. This one does.”
“Here is a $30 million tax,” Carrell said. “We should not be balancing the budget on the needs of babies, children, parents, grandparents. A direct tax on something that is now part of our culture.”

Sen. Rodney Tom, D-Medina, counters this is not a new tax. Prior to 2005 “we had sales tax on bottled water. We have billions of bottles that go in our landfills every year.”

Republican Sen. Curtis King replies: “This may not be a new idea. That doesn’t mean it’s a better idea.”

The bill covers 5-gallon containers in dispensers, but has an exemption for people who do not have potable water.

Amendment fails 19-26.

OLYMPIA — Republicans tried unsuccessfully to strip out changes on tax exemptions for solar projects.

Sen. Mike Carrell, R-Lakewood, said the Legislature is trying to encourage solar energy projects, and should keep the exemption.

Sen. Phil Rockefeller, D-Bainbridge Island, says it’s designed to spread money around among community solar projects, not have all the grant money go to mega projects.

Sen. Mark Schoesler, R-Ritzville, argues there’s no fiscal impact: “I don’t understand we are so worried about something that doesn’t raise any revenue.”

It fails on a voice vote.

Debate moves to an amendment to save an exemption to the Centralia Steam Plant, that foregives the sales tax that would be paid on the coal it buys to run the plant.

The state made a deal on the exemption in 1997 and should live up to it, said Sen. Dale Brandland, R-Bellingham: “For us to just pull the rug out from them on what I think was a legitimate deal, is sending the wrong message.”

Sen. Randy Gordon, D-Bellevue, says the exemption ” has outlived its usefullness. It was a local company and Washington coal, now it’s a Canadian company using Wyoming coal.

Sen. Don Benton, R-Vancouver, counters, “It might be a Canadian company, but the people who work their are Americans, 200 good family wage jobs.”

Sen. Lisa Brown, D-Spokane, argues that the exemption is “not a birthright. We can’t even get an exemption for out of state wind.” The company is looking at alternative energy sources, losing the exemption for buying coal will help push them in that direction.

Sen. Chris Marr, D-Spokane, says “a deal has two sides.” State got a promise it would get something in return, coal mining jobs in Lewis County, but it stopped mining its coal and put the miners out of work. “If it wants the exemption, it can go back to mining coal in Lewis County.”

Republicans argue about the effect of taxes on businesses, and Sen. Val Stevens reads a letter from a constituent that talks of government treating workers like serfs.

Sen. Adam Kline, D-Seattle, begins to talk of “a new kind of McCarthyism.”

That prompts Sen. Mark Schoesler to leap to his feet and demand, in a point of order, that Lt. Gov. Brad Owen warn Kline that talking about McCarthyism is “taking this in a direction you’ve asked us not to go.” Owen says he doesn’t know what direction Kline was going, because Schoesler interrupted him too quickly.

Kline said he was just tired of people interchanging socialism and communism and progressivism, and using it to argue against a tax bill.

Amendment fails 20-26 on a roll call vote.

.

OLYMPIA — Republicans ask to strip out theprovisions that make top corporate officers liable for unpaid taxes of a terminated or insolvent Limited Liability Corportion.

Sen. Joe Zarelli, R-Ridgefield, says that will just result in businesses setting up their LLCs in another state.

Sen. Tracey Eide, D-Seattle, counters: “It’s the CEOs that have gotten us into this mess. CEOs ought to know what they’re doing.”

Sen. Ed Murray, D-Seattle, says the legislators keep talking about accountability, it’s time to hold corporate officers accountable, too.

Sen. Cheryl Pflug, R-Maple Valley, argues its’ unfair: “It holds the CEO strictly liable…even if it’s not your fault. You’re already liable if it is your fault. I don’t feel better just because a CEO somewhere did something wrong, and got bailed out by the federal government.”

Sen. Mark Schoesler, R-Ritzville, adds the people covered in the tax bill are top officers at small corporations in Washington.: “This isn’t the fat cats that took our money. It’s hardly the Wall Street bailout.”

Sen. Pam Roach, R-Auburn, calls the bill “vindictive and predatory.” Sen. Lisa Brown, D-Spokane, objects that she seems to be impugning the motives or characters of Senate Democrats.

Lt. Gov. Brad Owen rules Brown is correct, although they don’t seem to be directed at a particular member. He warns everyone to be careful.

Pflug says Democrats are impugning CEOs. Owen says you can impugn any corporation you want, but not the individual.

“If I’m impugning anything, it would be the government,” Roach says.

Amendment fails, so the provision stays in the tax package, on a voice votes.

OLYMPIA — Sen. Don Benton offers an amendment to strip out a provision that gets rid of the exemption from the real estate excise tax for homes sold from foreclosure.

On normal sales, the real estate excise tax, or REET, is paid by the seller. But in foreclosures, the seller is gone and the bank is trying to get money back.

“The provision will tatke the responsibility of the previous owner and move it to the new owner,” Benton said. It’s another “onerous tax” that will stifle the real estate market and stall the recovery.

Sen. Rodney Tom, D-Medina, says it’s an issue of taxpayer fairness. Sell a house the normal way, the REET is paid. Sell it on the courthouse steps, it’s not. People show up for foreclosure auctions with cashiers checks to pay the whole amount he says. Perhaps, he adds, Benton has never been to an auction…

Benton objects. Lt. Gov. Brad Owen says people are getting a little sensitive. But I have been to an auction, Benton says. You can mention it in your closing remarks, Owen said.

Amendment fails 22-26 on a roll call vote.