Posts tagged: taxes
OLYMPIA — Initiative sponsor par excellance and alert reader Tim Eyman points out an inaccuracy in last Saturday’s item about the tax increases Gov. Chris Gregoire signed.
He and other tax foes in his camp have filed initiatives to repeal six of the taxes passed by the Legislature in its special session. The story said they had filed initiatives to repeal most of the taxes, and that’s numerically incorrect. The Legislature raised 17 taxes, so their initiatives only cover about a third of them.
Through various initiatives, Eyman et al want to repeal the new soda tax, the bottled water tax, the beer tax, the candy tax, the cigarette tax and the service industry business and occupation tax increase.
While these are the most recognizable (some might say notorious) tax changes coming out of the special session, there are about a dozen other smaller ones, such as the clarification of taxes on electricity from Public Utility Districts, taxes for officers of a failed limited liability corporation or the end to the sales tax exemption for handling livestock nutrients at dairies.
In terms of dollar figures, they are seeking to repeal taxes that would provide more than half of the new revenues the state expects to collect. But that’s different than “most of the taxes,” which is the phrase used in the item.
Gregoire signs tax bill as crowd that includes Rep. Ross Hunter (right) looks on.
OLYMPIA — Gov. Chris Gregoire signed two major tax increases Friday, insisting the state had no choice but to raise taxes on a wide range of businesses and consumer goods to protect key services.
She discounted any potential electoral backlash for Democrats from the tax increases in November, saying the budget isn’t a partisan issue.
“This is not about partisan politics. This is about tough times in the state of Washington,” Gregoire said.
When Washington was in a major economic downturn in the early 1980s, the governor was a Republican and both house of the Legislature were controlled by the GOP. They raised taxes, too, she said.
But voters gave the Legislature back to Democrats in the 1982 election, and defeated Gov. John Spellman in 1984.
“I’m not forgetting that,” Gregoire said. But she did consult with Spellman during the tax discussions, and he said the biggest mistake he made was extending the sales tax to food, a move which was overturned at the ballot box. “That’s why I’ve said let’s go for things that are discretionary.”
Between May 1 and July 1, taxes will go up on a wide range of goods and services.
Cigarettes will cost an extra $1 per pack. Candy, gum and bottled water will be subject to state and local sales taxes (they’re currently exempt as food). Soda pop will cost an extra 2 cents per 12 ounce can. Beer from major breweries will cost an extra 28 cents per six-pack, although microbrewed beer will be exempt from the new tax levy.
The service industry, which includes a wide range of businesses from lawyers and accountants to barbers and musicians, will pay an extra .3 percent on gross revenues. Out of state businesses will see new tax formulas, and companies that supply goods to in-state distributors will continue paying a tax that the state Supreme Court ruled last fall was improperly being levied against one major food supplier, DOT Foods.
Gregoire said Washington residents could avoid many of the consumption taxes by changing their habits — drinking tap water instead of bottled water, for example, or giving up smoking. Or they could continue buying those items and pay the increases, which would find everything from education programs to health care to senior programs: “I believe in the people of the state of Washington. I’m asking them to stand up.”
Republicans, who spent the 60-day regular session and the 30-day special session fighting any tax increases, called them job killers. Sen Janea Holmquist, R-Moses Lake, dubbed it the 7-11 Kwik-E-Mart tax package because so many of the items are the stables of convenience store sales.
OLYMPIA – Most years when the Legislature goes home, the winners and losers are pretty obvious. You count the scars and tote up the pork.
This year, everyone has scars and the Lege wasn’t cutting on a fat hog, so the final judgment may wait at least until November when voters decide whether half the Senate and the whole House should be rehired.
But some folks are better or worse off after the session lurched to its close early Tuesday morning than they were when it started in January with all the yada-yada about bipartisan cooperation.
Bipartisanship was a clear loser. Democrats had such a big majorities in both chambers that the real fight was among their factions, rather than a Republican/Democrat struggle.
The “business moderate” wing of the Democratic Party, which would include Spokane Sen. Chris Marr and Rep. John Driscoll, argued for more cuts and fewer tax hikes. They lost. They consistently voted against the budgets, but the budgets passed. Republican opponents might not be able to pound them quite so hard this fall, but the biz Ds will still have to work to distance themselves from the rest of the pack if voters are torqued.
OLYMPIA – By the time the Legislature wrapped up 90 days of heated and sometimes confusing debate over taxes and spending Tuesday, it had raised taxes on a wide array of consumers and businesses, cut some programs, boosted others, moved hundreds of millions of dollars around, and penciled in hundreds of millions more by betting on the federal government to come through.
But the final hours of the special session did not go smoothly, and at one point the governor made a rare visit to the Senate floor to keep the state from facing cash flow problems in the fall. The Senate had not passed a bill to move some $230 million from the state’s Rainy Day account into the general operating budget and without it, the state’s cash reserves could dip perilously low at some point before the two-year budget cycle ends in June 2011.
“I have a problem,” a visibly angry Gregoire said as she stormed passed reporters, into the wings of the Senate chamber and Senate Majority Leader Lisa Brown’s office at 11:12 p.m….
OLYMPIA — State Treasurer Jim McIntire added his kudos to the just concluded legislative session with a note that should make all Washingtonians feel a little better.
The state now probably has enough money to pay its bills through June 2011.
Not that the state would be bouncing checks or anything. But earlier in the session, McIntire notified legislators and the governor that the rate that money was coming in was not keeping pace with the way it was going out, and Washington could hit a point in the fall were its reserves were so low it might have to borrow short-term to pay some of its obligations. Like payroll.
“Based on a preliminary assessment of the tax and budget package, we believe we have a sufficient cushion to ensure we have the cash necessary to pay our bills,” McIntire said.
Other states, most notably California, had to issue I.O.U.s at one point because of cash flow problems.
OLYMPIA — The House passed the supplemental capital budget, the “bricks and mortar” budget that spends money on things like school buildings and sewer plants, as well as fire reduction, water projects and corrections.
It passed 61-36. Republicans, including Rep. Gary Alexander of Olympia, warned of the rising debt level the state is amassing. But Democrats said the bill provides jobs as well as needed infrastructure.
The end of the session is near.
OLYMPIA — The Senate passed the supplemental budget Monday evening, joining the House in a spending plan that tries to fill an estimated $2.8 billion hole in the state’s two-year operating budget.
On a 25-21 vote, it added its approval to the budget approved a few hours earlier across the Capitol.
Republicans, who were unanimous in their opposition, said the bill was being forced through without careful consideration, in the closing hours of the session, and has significant problems.
“Voting on a budget is a big decision,” Sen. Mark Schoesler, R-Ritzville said. “Those who are going to vote for it, have you read it?”
Sen. Mike Carrell, R-Lakewood, said the Legislature spent the month of a special session, figuring out how to raise taxes, not making any changes to a broken system.
Some Democrats also refused to support the budget. Sen. Rodney Tom of Bellevue said it doesn’t grasp the reality of the economy, and sets up education to fail.
But Majority Leader Lisa Brown, D-Spokane, said the economy is cyclical, and when times are tough, the demand for state services go up. “Just when the gap opens up, we need it the most. Many things are going to cost more, but we did the right thing..”
The budget has cuts as well as tax increases, Brown said, and no one say it’s perfect. “We are not a Legislature of 1. This job gets done by working together.”
Sen. Cheryl Pflug, R-Maple Valley, an economic downturn is not the time to implement all day kindergarten or a major energy savings construction plan. “How can we say it suddenly became a crisis to add these programs?” It may not be a Legislature of 1, she added “but it is a Legislature of one party.”
OLYMPIA — Democratic legislators released their spending plan with a combination of cuts and assumed tax hikes, designed to fill a $2.8 billion hole in the state’s operating budget.
If passed as expected later today or Tuesday, the budget pulls in $757 million in new taxes, cuts $840 million in programs, pulls in at least $618 million in federal funds, and moves nearly $600 million around from other accounts and reserves.
Among the cuts are nearly $55 million by closing or reducing state prisons. Slated for closure is the Pine Lodge Correctional Facililty for Women in Medical Lake.
In making the closures, budget negotiators “looked closely at a report done last year…and tried to minimize politics,” Rep. Kelli Linville, D-Bellingham, said. Pine Lodge is in the Spokane area, which has Senate Majority Leader Lisa Brown among its legislative delegation.
That report, however, recommends leaving Pine Lodge open to have a corrections center for women inmates in Eastern Washington. Asked about the difference, Linville replied: “We used the report as a basis. We were trying to use real information first, and then we negotiated the budget.”
The budget also cuts more than $150 million in K-12 programs, $73 million from colleges and assumes almost $49 million in savings through temporary layoffs of state employees.
It uses money from the tax increases to maintain all-day kindergarten, gifted program and levy equalization for public schools, state need grants for college students, the current levels for Basic Health and the Apple Health for children programs. Temporary assistance for needy family levels would remain at their current levels, as would most foster care payments and nursing home payments, and some nursing home cuts would be restored.
Approved by the Senate Ways and Means Committee was a supplemental Capital Budget Plan that would spend nearly $241 million for major and minor construction projects.
Included in the supplemental capital budget are $3.5 million for the Biomedical and Health Sciences Building at Washington State University Spokane’s Riverpoint Campus and about $3.5 million in repairs, maintenance and improvements to buildings at Eastern Washington State University. The proposed Spokane Aerospace Center also would receive $400,000.
The budgets have been under discussion since before the session began because the two-year budget approved by the Legislature last year has been out of balance almost from the day it went into effect on July 1, 2009. The gap between what the state can expect to take in from taxes and fees compared to what that original budget planned to spend grew to $2.8 billion by February. In ability to agree on a spending plan and tax increases forced a 30-day special session that is scheduled to end Tuesday.
But Monday afternoon was the first chance the public and some members of the Legislature got to see the finished product, which has been the subject of intense negotiations by Democratic leaders. Republicans who are in the minority and have refused to vote for any tax increases until significant reforms are made, have been largely shut out of the process.
Democratic budget negotiators defended the short notice and review time before legislators vote.
“We have gone through this time after time,” Sen. Ed Murray, D-Seattle, said. “I believe our members know what’s in this. There aren’t any surprises.”
“It was mostly our budget 30 days ago,” Linville said.
OLYMPIA – When talking about the Legislature, it’s easy to get wrapped up in parliamentary details and arcane political jargon. To avoid that, here’s a simple way to look at the budget and tax plans as the “seven-day” special session enters Day 28.
Think of solving the budget deficit as a family dinner. Like parents who profess to know what’s good for us, top legislative Democrats are about to make Washington residents eat our Brussels sprouts for the next 30 months.
They’ve treated options on the budget and taxes like menu choices. There’s stuff we all like, other things we’re OK with, and some things we’re going to turn our collective nose up at. Just as mom and dad don’t ask the kids to plan the menu, lest we ask for pizza and ice cream three times a day, they didn’t give us much say in what to serve.
For those who say “No fair!” parents can argue that when you’re going to serve Brussels sprouts, you certainly don’t tell the kids at noon, because they’ll just talk friends into having their moms invite them over. So the Democratic parental units held the menu close to the vest, not even releasing it until about a half-hour before the other grown-ups showed up Saturday. By then the menu was a done deal, with the Brussels sprouts purchased, in the pot, about to be put on the stove.
In the living room, the Republicans are arguing that we don’t need to eat Brussels sprouts.
OLYMPIA — Democratic leaders released their tax plan this afternoon, and as expected, it would raise taxes on the service industry, candy and gum, bottled water, mass-production beer, out-of-state companies with business in Washington, property management firms, some bank costs for servicing mortgages.
Some items discussed in previous hearings or approved in one chamber or the other over the last three months, were struck from the final plan. Spared new taxes are private plane owners, people who buy houses that are in foreclosure, machiinery used for wind powered turbines, coal purchased for for a power plant in Centralia, out-of-state shoppers hitting the stores in Washington, and consumers in general who at one point were facing a jump in the sales tax.
In total the tax package would raise about $668 million through the rest of the biennium, if Democrats have enough votes in the House and the Senate to pass it. Another $100 million would be raised in a separate bill, through higher taxes on tobacco.
Both chambers returned for floor debates and votes on the budget, taxes and several other issues at 2 p.m. Democrats quickly huddled in caucuses to see if they had the votes needed to pass the plan.
The House of Representatives, who has the tax package bill because the most recent vote on it occurred in the Senate, could vote on the proposal as soon as this evening if leaders determine they have the necessary 50 votes to pass it.
Legislators have until midnight Tuesday, when the special session expires, to complete all their work.
OLYMPIA – The Legislature returns Saturday with time running out in its special session and only two options on its unbalanced budget, Gov. Chris Gregoire said. Pass an array of taxes that covers everything from soda and bottled water to candy and cigarettes, or go home and have her cut the general fund budget by 20 percent.
A tax package, which has not been seen by the public because it was not final as of Friday afternoon, will be released along with a final spending plan sometime in the next four days. Democrats in both houses will have to get at least a simple majority to pass it, because Republicans remain united against any tax increase and want more cuts in wages, programs and state systems.
Based on comments by Gregoire, various legislative leaders and versions of the tax plan leaked to various news agencies or posted but later removed from a House Web site, the so-called go-home package collects an extra $800 million in taxes as part of a Democratic plan to close a $2.8 billion gap between projected revenues and scheduled expenses. The tax proposal:
• raises the tax on soda pop by the equivalent of about 2 cents a can or 50 cents a case at the wholesale level;
• places the state sales tax on bottled water, candy and gum;
• raises the tax on beer from large national breweries by 50 cents per gallon, or about a nickel for a 12 ounce can; microbreweries would be exempt;
• increases the business and occupation tax on most of the service industry from 1.5 percent to 1.8 percent of gross receipts;
• adds another $1 per pack to cigarettes, and similar tax increases to other tobacco products;
• changes systems for taxing out-of-state firms that do business in Washington.
Taxes on soda, bottled water, sweets, beer and the service industries would expire in mid 2013, although a future Legislature could change that.
Even though the public and most legislators haven’t seen the tax plan in writing, some of those affected are fighting the inclusion of their product or industry…
OLYMPIA — The Legislature did just this side of bupkiss in public Friday, to the chagrin of folks who bottle, distribute and sell soda, and some state employees hoping to make a point about layoffs.
A coalition of folks opposed to a proposed soda tax gathered on the steps of the Capitol this morning, hoping to make the most of media exposure before lobbying senators showing up for a full day of work.
But the schedule changed late Thursday and the Senate held only a pro forma session in which one Democrat and one Republican were on the floor for about 90 seconds until the gavel came down to go away and come back at 2 p.m. Saturday.
The House was also in pro forma, which is Latin for “we’ll get around to important stuff eventually”, and is also due back Saturday afternoon.
So the 50 or so soda pop tax folks out numbered visible senators roughly 25 to 1. (Heck, the number of reporters outnumbered visible senators by 2 to 1.) Sen. Karen Fraser, D-Olympia, who managed the floor for the majority party, insisted that lots of work was going on behind the scenes on budget and taxes.
Out on the steps, members of the anti-soda tax coalition insisted the new tax was unfair and would cost the state jobs. Ron Bradford of the Coca Cola Bottling operation in Spokane, said a fairer tax would be an increase in the sales tax.
“Overall, I think the people of Washington would accept it if this was a tenth of a cent or two,” said Bradford. The bottling operation has about 100 employees in production and distribution in Spokane, he said, but he’s not yet sure how many jobs would be lost if the tax went through.
The soda tax amounts to about 2 cents on a 12 ounce can, or 50 cents on a case. It’s really a double tax, Joe Gilliam, president of the Northwest Grocery Association, said because the tax goes on at the wholesale level, then is part of the amount subjected to the sales tax at retail.
He, too, argued the state should raise the sales tax, rather than pick from a menu of smaller taxes on soda, beer, bottled water, candy and gum
“It’s an issue of fairness,” Gilliam said. “Why should soda drinkers be more responsible for schools or prisons?”
The anti-soda tax coalition bought full-page ads in The Spokesman-Review and the Seattle Times Friday to drive home their point.As a counterweight, Rebuilding Our Economic Future Coalition , a group supporting the soda tax and other increases in the still-not-officially-released-because-we-might-not-have-the-votes tax package put up radio ads supporting it.
A group of state workers from the Department of Social and Health Services, which announced layoffs Thursday, planned a lunchtime march from their Olympia office to the Capitol, with hopes of sitting in the Senate gallery to help make their point. Before they were even close to the building, however, the pro forma session had opened and closed.
Anti-soda tax people said they’ll be back Saturday. So too, in all likelihood, will be squadrons of folks opposed to other taxes in the package. Could be an interesting four days, which is all the Legislature will have left in the special session. The opponents will be trying to peel off votes just as hard as Democratic leaders will be trying to add and hold them.
OLYMPIA — Democratic leaders in the House and Senate may still be searching for enough votes to pass their “go home” tax package, but some of the would-be taxed aren’t waiting for them to get a head count and reassemble at the capital.
Bottlers, convenience store owners and others opposed to the tax on soda will be protesting at 10 a.m. on the Capitol steps. Won’t be many legislators around to watch. Day 26 of the “Seven-Day Special Session” is a pro forma day, with few of the honorables even around.
They’re scheduled to start up real legislative business Saturday at 2 p.m. It’s a late start to accommodate the travel back to Olympia from their respective homes, where most of them have been for more than a week while Democratic leaders passed tax proposals back and forth.
They’ve allegedly settled on the “menu” approach: taxes on bottled water, soda, big brewery beer, a B&0 hike for service businesses; no bump in the sales tax, no trimming or gutting the sales tax exemption for out-of-state shoppers, no new tax on specialized software, no bump in taxes for private airplanes.
The plan hasn’t been released to the public yet — still needs to be tweaked — legislative sources say, but enough of it has been leaked that those who are about to get new taxes are already torqued.
Spokane Mayor Mary Verner says she’s not considering new taxes to bail the city out of its $10 million hole for 2011.
City leaders are getting an early start to the budget for the second year in a row and will present a preliminary budget plan to City Council by early May, Verner said in an interview this week. She said she is asking all departments to take an across-the-board cut of nearly 3 percent that will save $3.5 million and will unveil a plan in the coming weeks that will deal with the remeaining $6.5 million hole.
“Our work force will shrink this time around. There’s no way around it,” Verner said. “This year, there will be impact on services,”
Verner has ruled out raising utility taxes and says she doesn’t plan to ask voters for higher property taxes through a levy lid lift. That was part of Mayor Jim West’s strategy to help deal with significant deficits in 2005.
“I’m not counting on any increased on-going source of revenue,” Verner said. “One reason that I’m not counting on them is … I don’t know if they’re going to be viable in this economic climate.”
OLYMPIA — In an effort to break the logjam over which taxes to raise, the Legislature will appoint a conference committee with three members from each chamber to try to work things out.
The Senate rejected the House of Representatives’ rewrite of the tax package late this morning, and agreed to set up the committee. Senate Democrats named Margarita Prentice of Renton and Ed Murray of Seattle; Republicans named Joe Zarelli of Ridgefield.
House is out of session today, and may be tomorrow, so it’s possible the committee won’t meet until sometime next week.
The committee has public meetings to unveil any proposals, although much of the negotiations still take place in private. Whatever it agrees to must “sit on the bar” — be public — for 24 hours before a vote.
Four of the six members must agree, which means Democrats still have the upper hand in any agreement because they hold four seats. Minority Leader Mike Hewitt of Walla Walla said the process is really just for show, because they likely won’t have any input.
The divide between House Democrats and Senate Democrats will still have to be bridged. Murray said the Senate doesn’t have 25 votes for the mix of tax increases in the House tax package, and the House doesn’t have 50 votes to raise the sales tax by two-tenths of 1 percent, like the Senate proposed.
OLYMPIA – Using a compromise plan suggested by the governor, House Democrats stripped an increased sales tax out of plans to balance the state budget and countered with higher business taxes.
Saturday afternoon they voted 53-42 to stake out different territory in their efforts to combine tax increases with program cuts and federal money to fill a $2.8 billion budget hole.
The proposal got no support from Republicans, who called it at various times a job killer, legalized plunder and a pathway to socialism. It lost several Democrats, too, including Rep. John Driscoll of Spokane.
But Democrats who supported the bill said it was necessary to leave class sizes small, cover health care for the poor, keep guards in the prisons and state troopers on the highway.
Much of the package was proposed by Gov. Chris Gregoire late Friday in an effort to strike a deal between two very different tax approaches in the House and Senate. The two bills now become the basis for negotiations expected to take place over the weekend.
The House bill passed Saturday:
• Places a three-year surcharge on the business and occupation tax levied on many service businesses, raising the tax to 1.75 percent, up from 1.5 percent of gross receipts.
• Applies the sales tax to bottled water, currently classified as food and exempt from that tax. That tax would take effect May 1, in an effort to raise more money.
• Levies taxes on out-of-state companies who do business in Washington. Some of the language reinstates taxes thrown out by court decisions.
• Taxes manufacturers of custom software.
Cut from the tax bill are:
• The two-tenths of 1 percent sales tax increase approved Friday by the Senate.
• A sales tax to candy and gum, which the House approved in an earlier tax bill. Taxes on elective cosmetic surgery, also in that early House plan, are gone.
• An end to the real estate excise tax exemption on foreclosed properties. The House and Senate both voted to do away with that earlier this month
To read more about the tax bill, click here go inside the blog
OLYMPIA — TheSenate approved temporary jumps in state sales and business taxes, narrowly passing a tax plan that may not survive the weekend in the House.
Senate Democrats made some changes in the plan they passed during the regular session which also was gutted in the House. Instead of a three-tenths of 1 percent increase in the sales tax for the next three years, they approved a two-tenths of 1 percent increase for that period.
They approved temporary increases to the business and occupation tax, but also increased the credit for small businesses with sales of less than $72,000.
They also amended the bill to give exemptions from the business tax increases to researchers, non-profit hospitals and realtors.
Democrats emphasized that the tax increase was the smallest part of their budget solution, which also includes federal funding and cuts of some $5 billion from the budget they would have carried forward from the last biennium.
Republicans argued those aren’t all real cuts, but reductions in anticipated increases, brought on by overspending in previous years.
OLYMPIA – Idaho Gov. Butch Otter is suggesting Washington businesses come over to his side of the border if taxes go up like they have in Oregon.
In a “love letter to our neighbors,” Otter argues that Idaho has a better plan than other states for handling the recession: “Predictable tax and regulatory policies are what our employers need in order to maintain their operations through this rough patch.”
OLYMPIA — Sen. Val Stevens argues the tax falls unfairly on “direct sellers” like Avon ladies, and offers an amendment to strip provisions on the business and occupation tax changes out of that.
Sen. Rodney Tom, D-Medina, says she should read her own amendment, because she mentions sales taxes but the languages is about B&O taxes.
Stevens tries to close debate by suggesting Tom doesn’t understand basic economis.
Sen. Karen Keiser says it doesn’t affect Avon ladies, “it affects Avon, the multinational corporation.”
Amendment fails on a voice vote.