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SATURDAY, JUNE 17, 1995

Lowry Vetoes Majority Of Gop’s Tax Cuts Calls Reductions Danger To State’s Economy, Bond Rating

Gov. Mike Lowry, wading into a political thicket that could further reduce his chances for a second term, Friday vetoed more than half of the $501 million tax-cut package conservatives rammed through the Legislature.

It would be “fiscally and morally irresponsible” to approve the full package, Lowry said, citing the fluid economy, federal budget cuts and the potential price of a proposed property-rights initiative.

The cuts would cause reserves to dip dangerously low and could hurt the state’s bond rating, he said.

Outraged Republicans were already talking about a special session to override the vetoes, which is unlikely since Democrats could block the two-thirds supermajority required to second-guess their governor.

House Speaker Clyde Ballard, R-East Wenatchee, called it “an irresponsible attack on Washington taxpayers.”

State Republican Chairman Ken Ei kenberry said Lowry’s vetoes had “just put the final nail in Washington’s economy (and) also put the final nail in the coffin of his time as governor.”

Democratic leaders said the vetoes were understandable, given this week’s news that state revenue projections are down more than $180 million. That was not known when lawmakers were debating tax relief, noted Senate Majority Leader Marcus Gaspard, D-Puyallup.

Lowry, conceding that his actions will cause him some political heat, vetoed two of the main tax cuts sought by the conservatives:

A 50 percent rollback of the business-tax increases adopted during the 1993 budget crunch.

A permanent reduction in the state property tax.

The two totaled about $271 million.

Don Brunell, head of the Association of Washington Business, said the business tax-cut veto was “exactly the wrong thing to do,” given the sputtering economy and the woes of small and start-up businesses.

Last week, he signed a $148 million sales-tax break for manufacturers and on Friday, he approved a $54 million one-time property tax break for homeowners.The property tax cut, equal to 4.7 percent of the state-collected portion, will save the owner of a $100,000 home about $18 in 1996.The property-tax bill he vetoed would

have rolled back the state tax rate by 5 percent a year, permanently.The governor also vetoed a $6.5 million tax credit for insurance guaranty funds.

“The tax cuts were simply irresponsible,” Lowry told reporters, making clear he was referring to lawmakers from both parties. “The degree of the slashing of these tax cuts went way beyond responsible, beyond what’s affordable.”

xxxx Key tax cut vetoes A 50 percent rollback of the business-tax increases adopted during the 1993 budget crunch. A permanent reduction in the state property tax.



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