January 14, 2011 in City

Labor council to push to close tax loopholes

Unions to ask for 3-year moratorium on November ballot
By The Spokesman-Review

OLYMPIA – Labor leaders say they will push for something that is often mentioned but rarely accomplished in a legislative session: closing tax loopholes for many businesses to bring in more money for state services.

The Washington State Labor Council said it will support legislation to close off some $3 billion in tax exemptions for three years. “We simply can’t afford them right now,” Labor Council President Jeff Johnson said.

But closing loopholes is a tough order. Eliminating a tax exemption by the Legislature is the same as raising a tax, which requires a two-thirds majority in both houses under the provisions of an initiative voters approved in November.

The unions will ask instead for the Legislature to put the three-year moratorium on this November’s ballot and let the voters decide. That would only require a simple majority in each house, and a simple majority from voters.

Gov. Chris Gregoire urged the state to “be bold” in the face of economic forecasts that suggest the 2011-’13 budget is some $4.6 billion out of balance. Union leaders argued this was a bold plan because it would let voters decide whether certain tax exemptions deliver the benefits to the state that supporters claim and weigh them against the state services the lost tax revenue could buy.

Although the legislation isn’t drafted yet, among the exemptions union leaders said they might target are sales tax preferences for professional services like legal, engineering or architectural services, insurance and investment advice.

“We want to put something out there and make the case for it,” Johnson said.

The unions also want tax exemptions spelled out more clearly in the budget; evaluated frequently to ensure they are meeting goals; and reauthorized every five years only if they are effective.

The council also wants the state to set up a $100 million fund to help cities and counties with local infrastructure projects, increase unemployment payments to workers with dependents, and get injured workers back on the job with better incentives and expanding Centers for Occupational Health Excellence.

There are two comments on this story. Click here to view comments >>

Get stories like this in a free daily email