April 3, 2011 in City

Spin Control: Groups plan to make noise: Cut tax breaks, not spending

By The Spokesman-Review
 

OLYMPIA – When the party that’s in becomes the party that’s out, one can expect an increase of unhappy people coalescing and demonstrating against the new order.

But if one is aligned with the party that’s in, and those leaders aren’t doing what one thinks are the right things, is it still possible to raise the call, assemble the troops and storm the barricades?

Groups generally allied with the Democratic Party may discover that this week in Olympia. Labor unions, progressive community action groups, social service organizations and others plan four days of escalating protests in the Capitol, starting Tuesday. They’ll demand something that legislators have repeatedly said they won’t do: Remove tax exemptions for businesses. It’s the progressives’ preferred way to fill at least some of the $5.1 billion gap between the money the state expects to take in and the money it would have to shell out to keep programs and staffing levels in place.

Community groups from Olympia say they’ll bring in hundreds on Tuesday, similar groups from around the state will bring even more Wednesday, mental health care workers staging a one-day strike will be part of a protest Thursday, and state worker and crafts unions promise thousands on Friday. Admittedly there are often discrepancies between promise and delivery in such movements, but time will tell.

Their message, boiled to its essence, will be that the state’s poor, sick, elderly and children shouldn’t bear the brunt of an economic downturn brought on by risky business on Wall Street. The theme echoes around the nation in places like Madison, Wis., where protesters are fighting cuts by new Republican legislatures and chief executives.

But in Washington, the budgets are being proposed by Democrats. The sounds of marching feet and the shouts of protesters could be the backdrop to the week’s hearings and debates on the House Democrats’ spending plan, set for release Monday.

While there are very few sure things in this life – ask anyone who filled out an NCAA tournament bracket – it would be safe to bet dinner if not the rent that the tax exemptions aren’t going be cut in that budget.

Rep. Ross Hunter, D-Medina, chairman of the House Ways and Means Committee and thus chief architect of that budget proposal, said as much on Friday. People are free, even welcome, to protest, he said, adding, “That’s why we live in America.” But they aren’t going to change enough minds to close tax loopholes.

Senate Majority Leader Lisa Brown, D-Spokane, said essentially the same thing later that day. As a former demonstrator herself, Brown said she “would not rule out going out and talking to them” when the protesters gather. While she’d be willing to vote out some tax exemptions, there’s not a two-thirds majority of both houses to do it.

Legislators and Gov. Chris Gregoire, also in the coalition of the unwilling when it comes to ending tax exemptions, believe voters were clear last November that they oppose any tax increases. Protest organizers contend the mood of the public has changed since then, with more people starting to perceive a “war on the middle class.”

If so, the week of demonstrations may be the opening skirmish of a war to be waged at the ballot box this November and next. Clearly they were seeking recruits for battles to come by listing some of their least favorite exemptions, including some old standbys designed to inflame middle class sensibilities, like tax breaks for corporate jets and cosmetic surgery. The problem is, even if cemented shut those loopholes would produce only a few million in revenue toward filling the $5.1 billion gap.

To make a real dent through tax exemptions, the state would have to follow the sage advice of Willy Sutton and go where the money is. The biggest tax exemption is the one that keeps sales tax off food, worth about $1.7 billion. No sales tax on prescription drugs costs about $613 million, according to the special committee that tracks tax breaks. There are hundreds of smaller ones, of course, each with its own constituency that could join the other side if their exemption is closed.

For the new generals, closing tax exemptions could prove a risky strategy.

Spin Control, a weekly column by Olympia bureau chief Jim Camden, also appears online with daily items, reader comments and videos at spokesman.com/spincontrol.


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