April 16, 2009 in City

Lawmakers propose sales tax increase

Richard Roesler Staff writer

OLYMPIA – Voters this fall may find themselves asked this question: Would you be willing to pay a slightly higher sales tax if the millions of dollars it raises went to hospitals, nursing homes and other health care needs?

House Democrats have written a bill that would boost the state sales tax by three-tenths of 1 percentage point – that’s 3 cents on a $10 purchase – to offset health care budget cuts.

Neither the House nor Senate has approved the plan, but legislative leaders have said they’re interested in asking voters to approve increased taxes.

“There’s real concern over the massive cuts in health and human services in this budget,” House Speaker Frank Chopp, D-Seattle, said recently. He said he’d be “very interested” in a plan like House Bill 2377.

To offset the tax hit to those who could least afford it, the bill would also steer about $105 million of the money raised into tax rebates for low-income people. The plan is modeled on the federal Earned Income Tax Credit. This year, a family of four earning up to $43,415 would qualify.

“An unprecedented shortfall in state general fund revenues has threatened the state’s ability to fund vital health services,” the bill begins, “and has harmed working families.”

The tax increase would only take effect if voters approve it. And it would be temporary, expiring Dec. 31, 2012.

The hundreds of millions of dollars raised over two years would help pay for health coverage for poor families, public health services, health care, mental health care, hospitals and nursing homes. The money raised would provide:

•$167 million for the Basic Health Plan, coverage for low-income families.

•$77 million for long-term care and nursing homes.

•$75 million for hospitals.

•$19 million for the Healthy Options health care program.

•$3 million to go to local health agencies for “core public health functions of statewide significance.”

If voters approve, the increase would take effect Dec. 15.

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