March 3, 2010 in City

Tax plan progresses in spite of criticism

Committee votes 6-3 to debate bill on House floor
By The Spokesman-Review
 

On the Web: For a look at how the House Democrats’ tax proposal compares with other tax plans, go to www.spokesman.com.

2010

Legislature

OLYMPIA – A new tax proposal would place unfair burdens on a wide range of residents, from janitors to plastic surgeons and cigar sellers to candy makers, opponents of the plan said Tuesday.

It would also raise money for schools, colleges, the poor and the sick, supporters of the proposal said.

The proposed tax increases are a good start, but there needs to be more of them, said a third group of witnesses as the House Finance Committee held a hearing on a $758 million tax package announced less than 24 hours earlier.

With some minor adjustments, the committee voted 6-3 to send House Bill 3191 to the floor for debate, even though some Democrats who voted for it Tuesday want changes before it passes. “This is not what will pass off the floor of the House,” Rep. Larry Springer, D-Kirkland, said.

Committee Republicans, including Kevin Parker of Spokane, all voted no. “Our problem is spending, not revenue,” Rep. Cary Condotta, R-East Wenatchee, said. “We have a certain amount of revenue to work with … We need to change direction.”

The proposal would extend the sales tax to janitorial services. Ron Kauffman of the Building Owners and Managers Association, said in the current market, janitorial companies wouldn’t be able to pass on the increase to financially strapped clients, and would pay it themselves, then cut costs by laying off workers.

The sales tax also would be extended to candy, now exempt as a food item; the money would restore medical and dental programs for children.

Good idea, said Theresa Mosqueda of the Children’s Alliance: “We can no longer afford to subsidize candy and sweets. These items are not food items.”

Bad idea, said Pierson Clair, CEO of Brown and Haley in Tacoma, which makes Almond Roca. Whether it’s taxable depends on how it’s prepared, he said. Freeze the same ingredients in an Almond Roca – sugar, milk, eggs and almonds – and you have ice cream, which isn’t taxed. Under the law, sweet treats with flour would be tax-free, so a Kit-Kat bar wouldn’t be taxed, but Almond Roca would.

Another proposal to place the sales tax on elective cosmetic surgery would be hard to enforce because insurance companies have different rules on what’s elective, said William Portuese, a Seattle plastic surgeon. Even a procedure deemed elective may be necessary for people to keep jobs, particularly women, who are about 86 percent of his patients, he said. “This is a discriminatory tax against working women.”

Tobacco shop operators said raising the tax on cigars from 50 cents to $1 will prompt customers to go across state lines or onto Indian reservations. The committee later adopted an amendment to drop the tax increase to 65 cents, which Committee Chairman Ross Hunter, D-Medina, said had been his original intent.

Nancy Quan, a spokeswoman for AARP, said taxing cigars and cosmetic surgery makes more sense than cutting the state’s Basic Health plan: “Please consider what more can be done to raise revenues so we can protect services.”

Some Democratic members of the committee signaled they were unhappy with omissions and additions to the proposal, or with the way Hunter put together the proposal. Rep. Sharon Tomiko Santos, D-Seattle, said committee members were shut out of the process of drafting the bill, and hope they will be included in amending it.


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