Washington House OKs tax plan
Budget impasse finally broken; Senate votes today or Monday
OLYMPIA – Democratic leaders began pushing a package of some $668 million in higher taxes through the Legislature on Saturday, suspending rules as they tried to beat the Tuesday deadline to adjourn.
The House of Representatives voted 52-44 to approve a tax plan made public a few hours earlier after more than a week of closed-door negotiations between Democratic leaders and Gov. Chris Gregoire.
Some Democrats who voted yes conceded it was a less than perfect plan. Rep. Timm Ormsby of Spokane said he liked some of the earlier House tax proposals which closed off more tax exemptions and hit consumers of certain items less.
The proposal would raise taxes on candy and gum, soda, bottled water and mass-production beer.
“These are some of the things that people use to reward themselves,” said Ormsby, the sole Spokane-area representative voting yes. But the bill couldn’t be amended because of legislative rules governing the way it was presented, so it was an up or down vote on a plan to balance the budget, he said.
Republicans were united against the bill, contending it wouldn’t treat people equally. Rep. Doug Ericksen, R-Ferndale, noted that beer from large out-of-state breweries is taxed an extra 50 cents a gallon, or about a nickel for a 12-ounce can, but more expensive beer from microbreweries is exempt from the tax.
“This Legislature couldn’t even be fair on how it raises the tax on beer,” he said. “You stick it to the working man and give the high-fallutin’, high-paid guy in Seattle a break.”
The proposal would also raise taxes on the service industry, on out-of-state companies doing business in Washington, property management firms, and on some bank costs for servicing mortgages. Rep. Larry Crouse, R-Spokane Valley, said it was the worst of several tax packages the House has passed during the session.
“You’re targeting businesses, and some of them are right on the edge now,” said Crouse, who said a general sales tax increase would have been fairer if taxes had to be raised. “This is a job killer.”
Rep. Ross Hunter, D-Medina, one of the architects of the plan, said the House and Senate struggled for months to find a tax package that could pass both chambers, and this was the result. “I don’t like everything in this package,” he said. “But I like 20 percent across-the-board cuts even less.”
Gregoire warned legislators if they can’t pass a tax package and a balanced budget by the session’s end at midnight Tuesday, she’d cut all programs not constitutionally mandated by 20 percent.
The Senate is to vote on the same package either today or Monday.
“I believe we’ll have 25 votes,” said Majority Leader Lisa Brown, D-Spokane. Some members want a closer look at the spending package, which is separate from the tax proposal, before making a final commitment on taxes. It may not be the same 25 Democrats who voted for previous tax plans, she added.
A late addition to the plan is a tax on soda of 2 cents per can or about 50 cents per case. Representatives of the state’s soft drink bottling and distribution industry – many in bright red Coca-Cola or blue Pepsi shirts – flooded the hallways before floor action in an effort to peel off support for the package. But so did green-shirted members of the state employees unions, who face more layoffs in an “all-cuts” budget with no tax increase.
Democratic leaders have been negotiating the tax package in secret for more than a week but released the full plan to the public some 30 minutes before members began floor action. Legislative leaders had said the bill would have to sit for 24 hours before any votes were taken, but that rule was suspended and the House voted in the early evening.
Jason Mercier of the Washington Policy Center, a fiscally conservative watchdog group, blasted the rush to vote on a 112-page bill that most legislators hadn’t even read.
“Regardless of how one plans to vote, it is very disappointing that state representatives not only believe they don’t need at least a day to study the details of a massive tax increase,” he said, “but that their constituents don’t deserve this common sense courtesy either.”