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Inslee proposes closing $200 million in tax loopholes

Tue., Jan. 28, 2014, 10:36 a.m.

OLYMPIA — Gov. Jay Inslee wants to end seven tax exemptions to raise an extra $200 million in the next fiscal year for public schools.

The money would pay for the reforms the Legislature or voters have previously approved but are not in the current budget, including a 1.3 percent salary increase for teachers and staff.

He says the money will include sending $130 million to K-12 public schools to pay for textbooks, computers and curriculum updates.

All of the tax breaks are ones he proposed last year, but didn’t survive the budget discussions during a 105-day regular session and two 30-day special sessions. He wouldn’t say whether he would keep the Legislature past the deadline of its current 60-day session, already two weeks old, contending “that’s getting the cart before the head of the horse”.

“I don’t think there’s any reason we can’t do this,” he added. “It’s teed up.”

The seven tax exemptions he wants to close are ones the Legislature has considered for years, and which he proposed last year. One, extending the sales tax to bottled water, was among those passed by the Legislature in 2010, but repealed by voters later that year.

Also on Inslee’s list:

—Repealing the sales tax exemption for trade-ins valued at more than $10,000

—Ending the refund of the state portion of sales tax for purchases by some nonresidents

—Repealing the public utility tax for in-state portion of interstate transportation

—Repealing the tax exemption for certain extracted fuels

—Repealing the sales tax exemption for janitorial services

—Repealing the preferential business and occupation tax for resellers of prescription drugs

The governor says he was inspired to find more money for education this year by the Supreme Court’s recent order that the state needs to move faster toward fully paying the cost of basic education.

Members of the predominantly Republican Majority Coalition Caucus in the Senate have said the state added $1 billion to public schools last year and the Legislature should concentrate on reforms this year. Any extra money that is needed should be found within existing revenues as the state makes good on its constitutional mandate to make education its paramount duty, they have sad.


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