Special Wash. legislative panel to seek tax compromise

OLYMPIA — In an effort to break the logjam over which taxes to raise, the Legislature will appoint a conference committee with three members from each chamber to try to work things out. The Senate rejected the House of Representatives’ rewrite of the tax package late this morning, and agreed to set up the committee. Senate Democrats named Margarita Prentice of Renton and Ed Murray of Seattle; Republicans named Joe Zarelli of Ridgefield. House is out of session today, and may be tomorrow, so it’s possible the committee won’t meet until sometime next week. The committee has public meetings to unveil any proposals, although much of the negotiations still take place in private. Whatever it agrees to must “sit on the bar” — be public — for 24 hours before a vote. Four of the six members must agree, which means Democrats still have the upper hand in any agreement because they hold four seats. Minority Leader Mike Hewitt of Walla Walla said the process is really just for show, because they likely won’t have any input. The divide between House Democrats and Senate Democrats will still have to be bridged. Murray said the Senate doesn’t have 25 votes for the mix of tax increases in the House tax package, and the House doesn’t have 50 votes to raise the sales tax by two-tenths of 1 percent, like the Senate proposed. The state is facing a projected $2.8 billion gap between revenue and expenses in the general fund budget approved last year. As part of the plan to close that gap, House and Senate Democrats have agreed to raise taxes by about $800 million; they’ll take money from various reserves and the federal government for some of the remainder, and make cuts to staff or services for the rest. Last week the Senate passed a bill that included a scaled-down version of the sales tax increase approved in the regular session. That bill went to the House, where the entire bill was stripped and a substitute suggested by Gov. Chris Gregoire replaced it. That bill relies more heavily on an increase in the business and occupation tax levied on service businesses. It also repeals the exemption that out-of-state residents have to the sales tax when shopping in Washington. Murray said individual members of the Senate have problems with portions of the House version and it wouldn’t get the necessary 25 votes needed to pass.