February 4, 2011 in City

Business tax cut approved by Washington Senate

House to vote next week
By The Spokesman-Review

OLYMPIA – A proposed $300 million tax cut for Washington businesses pingponged through the Legislature Friday as one version passed the Senate with strong bipartisan support but another version was being served up by the House.

Both versions would cancel unemployment insurance rate hikes scheduled to take effect this year for about 90 percent of businesses. Both would allow unemployed workers who are about to exhaust benefits to receive extra payments from the federal government.

The Senate version, passed Friday morning on a 46-1 vote, ends there. It leaves for later a question about the best way to change the unemployment system to tap $98 million in federal money.

“This is another piece to the puzzle,” said Sen. Janea Holmquist Newbry, R-Moses Lake.

Gov. Chris Gregoire and some legislators want to use that money to expand training for unemployed workers. Other legislators want to use the money to increase cash benefits for the unemployed.

Fight that out later, Gregoire said recently. The scheduled rate increase, which is mandated by statute, has to be cancelled by next Tuesday, she said.

But House Democratic leaders said Friday afternoon they believe there’s a way to expand training programs and give unemployed workers a temporary across-the-board weekly increase of $10 to $20. “We’re saying let’s do one thing that’s comprehensive,” House Speaker Frank Chopp, D-Seattle, said.

Chopp said they have talked with House Republicans and believe they can pass that version Monday with bipartisan support.

That would send the bill back to the Senate and test that chamber’s newfound spirit of bipartisanship, which approved both the unemployment insurance bill and a supplemental budget Friday morning. Earlier in the week, a group of six Democrats joined with Republican senators to block a different change in the unemployment system.

Chopp said he thinks a bill that blocks the unemployment tax increase can still pass both chambers and be signed by Gregoire on Tuesday. But if it takes a few days longer, he believes, the tax hike can still be stopped, because Feb. 8 is an administrative deadline to give notice of any changes to businesses that don’t have to pay the taxes until April.

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