Legislature begins reconciling budgets

OLYMPIA – With just over two weeks remaining in the session, Democrats in both houses of the Washington Legislature released plans Tuesday to cut programs and raise taxes to fill a $2.8 billion hole in the state budget.

While both expect some federal help on things like rising health care costs, and call for a “balanced approach” to the state’s budget woes, they strike that balance differently. They also differ significantly with Gov. Chris Gregoire’s latest budget, released last week.

Reconciling the three plans now begins, with the Legislature scheduled to adjourn March 11.

All three budgets would raise taxes to fill at least part of the budget gap.

Senate Democrats would add three-tenths of a cent to the state sales tax for the next three years, put an extra $1 per pack tax on cigarettes and eliminate some tax exemptions. Most are business exemptions, but also listed is the exemption for the trade-in value of an item used to reduce the purchase price of a car, boat or other vehicle.

The Legislature cut more than any of its predecessors last year and didn’t raise taxes, said Senate Majority Leader Lisa Brown, D-Spokane. But an all-cuts budget this year would dismantle public institutions and programs, she contended.

“There will be further reforms, further reductions and there will be revenues as well,” Brown said.

Gregoire’s budget shares the tax on cigarettes and several closures of so-called loopholes for businesses. But she skips a general sales tax hike, saying it would hurt the recovery, but extends it to candy and gum. Her budget gets a short-term infusion into the general fund through a rise in the state tax on toxic substances, which the oil refinery industry says could raise the price of gasoline by 3 cents per gallon, and taxes on soda and bottled water.

House Democrats would only say Tuesday how much they want to get from tax increases, not which taxes they want to increase. They’ll announce a tax package today.

Republicans in both chambers denounced the latest budget proposals. Sen. Joe Zarelli, R- Ridgefield and the GOP’s budget expert in the Senate, said Democrats were trying to “balance the budget on the backs of working families.”

Sen. Mark Schoesler, R-Ritzville, said the combination of taxes on toxics, which could raise the price of farm chemicals, the loss of the trade-in allowance and closing other exemptions for agriculture amounted to “a war on agriculture.”

Rep. Joe Schmick, R-Colfax, said the House proposal guarantees more budget problems next year.

Although all Republicans and some Democrats in each chamber oppose any tax increases, legislators paved the way for some tax increase Monday. That’s when the Senate gave final approval to the suspension of the two-thirds majority and other requirements for raising taxes approved by voters in a 2007 state initiative.

Gregoire said she plans to sign that bill today.