February 26, 1998 in City

Lawmakers Slow Tax Cuts For Businesses

Hal Spencer Associated Press
 

The torrent of business tax cuts in recent years has slowed to a trickle this year as Republicans instead reserve the serious money to pay for a handsome election-year tax break for ordinary citizens.

The Republican majority in each chamber is preparing to offer voters a flat $40-a-year cut in their car-tab tax. Democrat Gov. Gary Locke also favors the tax break, although his proposal would be $30 instead of $40.

The cost of the legislative proposal would be about $365 million in the coming two-year budget cycle starting July 1, 1999.

Meanwhile, the Legislature is considering targeted tax cuts for business that at most would add up to $36 million to $50 million over two years. That contrasts with business tax cuts in the past three sessions that were worth about $600 million over two years.

“We are not getting the big tax cuts this year” and part of the reason is the Legislature wants to be able to afford to offer a generous tax cut to voters in this election year, said Carolyn Logue, a lobbyist for the National Federation of Independent Business.

But, she said, business hasn’t lobbied very hard for big cuts this year, content to wait and measure the effect of cuts in sales, B&0 and other taxes in the last three sessions.

“Mostly, we’ve been concerned with making sure there aren’t any tax increases,” she said, including an apparently dead proposal from Locke to raise the 23-cents-a-gallon gasoline tax by 11 cents over five years.

As it stands this year, the two chambers are preparing to send to voters in November a $2.4 billion proposal to begin financing highway improvements through bonds. As a way to attract voter-approval, the package will contain the $40 reduction in the car-tab tax.

Meanwhile, each chamber is moving a flurry of small tax cuts for business.

The House on Wednesday sent the Senate measures to give tax breaks to commercial laundries, small irrigation districts and the pharmaceutical industry. The measures are among a dozen adding up to about $25 million in tax breaks.


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