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HBO Poll: Accountant Does MyTaxes

  • Wednesday Poll: A plurality of 61 of 152 respondents (40%) said that an accountant does their taxes for them. 50 of 152 (33%) said they use tax software to do their taxes. 30 of 152 (20%) said they do their own taxes. 8 of 152 (myself included) said they use a firm like H&R Block to do their taxes. And 3 of 152 (2%) said they don’t file returns.
  • Pro-Tech School: 62 of 103 respondents (60%) said they’d support a $9.5M capital facilities levy to build a professional-technical school on the Rathdrum Prairie.
  • Today’s Question (in lefthand rail): Why is Jim Brannon pursuing his lawsuit against Mike Kennedy?

Adam: WalMart Embracing Lower Taxes

Wal-Mart is not moving (from Moscow) to a place where they’ll pay higher taxes, but lower taxes. The National Tax Foundation has the run-down on the State of Washington. Washington ranks 9th in the Nation in Business Tax environment and has the nation’s 35th lowest state and local tax burden. Most importantly, Washington does not have that great disincentive to industry and productivity, the income tax. Individuals and corporations pay exactly zero on their productivity and labor. How does Idaho compare? We rank 18th in business tax environment with heavy progressive taxes on individual and corporate income/Adam Graham, Adam’s Blog. More here.

Question: Are you surprised that Washington has a better business tax environment than Idaho?

WA Lege SpecSess: At the end of the day…it’s the middle of the night

OLYMPIA – By the time the Legislature wrapped up 90 days of heated and sometimes confusing debate over taxes and spending Tuesday, it had raised taxes on a wide array of consumers and businesses, cut some programs, boosted others, moved hundreds of millions of dollars around, and penciled in hundreds of millions more by betting on the federal government to come through.
But the final hours of the special session did not go smoothly, and at one point the governor made a rare visit to the Senate floor to keep the state from facing cash flow problems in the fall. The Senate had not passed a bill to move some $230 million from the state’s Rainy Day account into the general operating budget and without it, the state’s cash reserves could dip perilously low at some point before the two-year budget cycle ends in June 2011.
“I have a problem,” a visibly angry Gregoire said as she stormed passed reporters, into the wings of the Senate chamber and Senate Majority Leader Lisa Brown’s office at 11:12 p.m….

State treasurer to Lege: OK, we can pay the bills.

OLYMPIA — State Treasurer Jim McIntire added his kudos to the just concluded legislative session with a note that should make all Washingtonians feel a little better.

The state now probably has enough money to pay its bills through June 2011.

Not that the state would be bouncing checks or anything. But earlier in the session, McIntire notified legislators and the governor that the rate that money was coming in was not keeping pace with the way it was going out, and Washington could hit a point in the fall were its reserves were so low it might have to borrow short-term to pay some of its obligations. Like payroll.

“Based on a preliminary assessment of the tax and budget package, we believe we have a sufficient cushion to ensure we have the cash necessary to pay our bills,” McIntire said.

Other states, most notably California, had to issue I.O.U.s at one point because of cash flow problems.

WA Lege SpecSess: Capital budget passes

OLYMPIA — The House passed the supplemental capital budget, the “bricks and mortar” budget that spends money on things like school buildings and sewer plants, as well as fire reduction, water projects and corrections.

It passed 61-36. Republicans, including Rep. Gary Alexander of Olympia, warned of the rising debt level the state is amassing. But Democrats said the bill provides jobs as well as needed infrastructure.

The end of the session is near.

WA Lege SpecSess: Senate passes budget

OLYMPIA — The Senate passed the supplemental budget Monday evening, joining the House in a spending plan that tries to fill an estimated $2.8 billion hole in the state’s two-year operating budget.

On a 25-21 vote, it added its approval to the budget approved a few hours earlier across the Capitol.

Republicans, who were unanimous in their opposition, said the bill was being forced through without careful consideration, in the closing hours of the session, and has significant problems.

“Voting on a budget is a big decision,” Sen. Mark Schoesler, R-Ritzville said. “Those who are going to vote for it, have you read it?”

Sen. Mike Carrell, R-Lakewood, said the Legislature spent the month of a special session, figuring out how to raise taxes, not making any changes to a broken system.

Some Democrats also refused to support the budget. Sen. Rodney Tom of Bellevue said it doesn’t grasp the reality of the economy, and sets up education to fail.

But Majority Leader Lisa Brown, D-Spokane, said the economy is cyclical, and when times are tough, the demand for state services go up. “Just when the gap opens up, we need it the most. Many things are going to cost more, but we did the right thing..”

The budget has cuts as well as tax increases, Brown said, and no one say it’s perfect. “We are not a Legislature of 1. This job gets done by working together.”

Sen. Cheryl Pflug, R-Maple Valley, an economic downturn is not the time to implement all day kindergarten or a major energy savings construction plan. “How can we say it suddenly became a crisis to add these programs?” It may not be a Legislature of 1, she added “but it is a Legislature of one party.”

WA Lege SpecSess: Budgets released, vote to come

OLYMPIA — Democratic legislators released their spending plan  with a combination of cuts and assumed tax hikes, designed to fill a $2.8 billion hole in the state’s operating budget.

If passed as expected later today or Tuesday, the budget pulls in $757 million in new taxes, cuts $840 million in programs, pulls in at least $618 million in federal funds, and moves nearly $600 million around from other accounts and reserves.

Among the cuts are nearly $55 million by closing or reducing state prisons. Slated for closure is  the Pine Lodge Correctional Facililty for Women in Medical Lake.

In making the closures, budget negotiators “looked closely at a report done last year…and tried to minimize politics,” Rep. Kelli Linville, D-Bellingham, said. Pine Lodge is in the Spokane area, which has Senate Majority Leader Lisa Brown among its legislative delegation.

That report,  however, recommends leaving Pine Lodge open to have a corrections center for women inmates in Eastern Washington. Asked about the difference, Linville replied: “We used the report as a basis. We were trying to use real information first, and then we negotiated the budget.”

The budget also cuts more than $150 million in  K-12 programs, $73 million from colleges and assumes almost $49 million in savings through temporary layoffs of state employees.

It uses money from the tax increases to maintain all-day kindergarten, gifted program and levy equalization for public schools, state need grants for college students, the current levels for Basic Health and the Apple Health for children programs. Temporary assistance for needy family levels would remain at their current levels, as would most foster care payments and nursing home payments, and some nursing home cuts would be restored.

Approved by the Senate Ways and Means Committee was a supplemental Capital Budget Plan that would spend nearly $241 million for major and minor construction projects.

Included in the supplemental capital budget are $3.5 million for the Biomedical and Health Sciences Building at Washington State University Spokane’s Riverpoint Campus and about $3.5 million in repairs, maintenance and improvements to buildings at Eastern Washington State University. The proposed Spokane Aerospace Center also would receive $400,000.

The budgets have been under discussion since before the session began because the two-year budget approved by the Legislature last year has been out of balance almost from the day it went into effect on July 1, 2009. The gap between what the state can expect to take in from taxes and fees compared to what that original budget planned to spend grew to $2.8 billion by February. In ability to agree on a spending plan and tax increases forced a 30-day special session that is scheduled to end Tuesday.

But Monday afternoon was the first chance the public and some members of the Legislature got to see the finished product, which has been the subject of intense negotiations by Democratic leaders. Republicans who are in the minority and have refused to vote for any tax increases until significant reforms are made, have been largely shut out of the process.

Democratic budget negotiators defended the short notice and review time before legislators vote.

“We have gone through this time after time,” Sen. Ed Murray, D-Seattle, said. “I believe our members know what’s in this. There aren’t any surprises.”

“It was mostly our budget 30 days ago,” Linville said.

A different way to chew on the tax debate

OLYMPIA – When talking about the Legislature, it’s easy to get wrapped up in parliamentary details and arcane political jargon. To avoid that, here’s a simple way to look at the budget and tax plans as the “seven-day” special session enters Day 28.

Think of solving the budget deficit as a family dinner. Like parents who profess to know what’s good for us, top legislative Democrats are about to make Washington residents eat our Brussels sprouts for the next 30 months.

They’ve treated options on the budget and taxes like menu choices. There’s stuff we all like, other things we’re OK with, and some things we’re going to turn our collective nose up at. Just as mom and dad don’t ask the kids to plan the menu, lest we ask for pizza and ice cream three times a day, they didn’t give us much say in what to serve.

For those who say “No fair!” parents can argue that when you’re going to serve Brussels sprouts, you certainly don’t tell the kids at noon, because they’ll just talk friends into having their moms invite them over. So the Democratic parental units held the menu close to the vest, not even releasing it until about a half-hour before the other grown-ups showed up Saturday. By then the menu was a done deal, with the Brussels sprouts purchased, in the pot, about to be put on the stove.

In the living room, the Republicans are arguing that we don’t need to eat Brussels sprouts.

Tax plan passes House, heads to Senate

OLYMPIA – Democratic leaders began pushing a package of some $668 million in higher taxes through the Legislature Saturday, suspending rules as they tried to beat the Tuesday deadline to adjourn.
The House of Representatives voted 52-44 to approve the tax plan that was just made public a few hours earlier after more than a week of closed-door negotiations between Democratic leaders and Gov. Chris Gregoire.
Some Democrats who voted yes conceded it was a less than perfect plan. Rep. Timm Ormsby of Spokane said he liked some of the earlier House tax proposals which closed off more tax exemptions and hit consumers of certain items less.
The proposal would raise taxes on candy and gum, soda, bottled water and mass-production beer.
“These are some of the things that people use to reward themselves,” said Ormsby, the sole Spokane-area representative voting yes. But the bill couldn’t be amended because of legislative rules governing the way it was presented, so it was an up or down vote on a plan to balance the budget, he said.
Republicans were united against the bill, contending it wouldn’t treat people equally. Rep. Doug Ericksen, R-Ferndale, noted that beer from large out-of-state breweries is taxed an extra 50 cents a gallon, or about a nickel for a 12-ounce can, but more expensive beer from microbreweries is exempt from the tax.
“This Legislature couldn’t even be fair on how it raises the tax on beer,” he said. “You stick it to the working man and give the high-fallutin’, high-paid guy in Seattle a break.”

WA Lege SpecSess: Tax plan cometh

OLYMPIA — Democratic leaders released their tax plan this afternoon, and as expected, it would raise taxes on the service industry, candy and gum, bottled water, mass-production beer, out-of-state companies with business in Washington, property management firms, some bank costs for servicing mortgages.

Some items discussed in previous hearings or approved in one chamber or the other over the last three months, were struck from the final plan. Spared new taxes are private plane owners, people who buy houses that are in foreclosure, machiinery used for wind powered turbines, coal purchased for for a power plant in Centralia, out-of-state shoppers hitting the stores in Washington, and consumers in general who at one point were facing a jump in the sales tax.

In total the tax package would raise about $668 million through the rest of the biennium, if Democrats have enough votes in the House and the Senate to pass it. Another $100 million would be raised in a separate bill, through higher taxes on tobacco.

Both chambers returned for floor debates and votes on the budget, taxes and several other issues at 2 p.m. Democrats quickly huddled in caucuses to see if they had the votes needed to pass the plan.

The House of Representatives, who has the tax package bill because the most recent vote on it occurred in the Senate, could vote on the proposal as soon as this evening if leaders determine they have the necessary 50 votes to pass it.

Legislators have until midnight Tuesday, when the special session expires, to complete all their work.

Gregoire on tax plan: Don’t go changin’, rearrangin’

OLYMPIA – The Legislature returns Saturday with time running out in its special session and only two options on its unbalanced budget, Gov. Chris Gregoire said. Pass an array of taxes that covers everything from soda and bottled water to candy and cigarettes, or go home and have her cut the general fund budget by 20 percent.

A tax package, which has not been seen by the public because it was not final as of Friday afternoon, will be released along with a final spending plan sometime in the next four days. Democrats in both houses will have to get at least a simple majority to pass it, because Republicans remain united against any tax increase and want more cuts in wages, programs and state systems.

Based on comments by Gregoire, various legislative leaders and versions of the tax plan leaked to various news agencies or posted but later removed from a House Web site, the so-called go-home package collects an extra $800 million in taxes as part of a Democratic plan to close a $2.8 billion gap between projected revenues and scheduled expenses. The tax proposal:

• raises the tax on soda pop by the equivalent of about 2 cents a can or 50 cents a case at the wholesale level;
• places the state sales tax on bottled water, candy and gum;
• raises the tax on beer from large national breweries by 50 cents per gallon, or about a nickel for a 12 ounce can; microbreweries would be exempt;
• increases the business and occupation tax on most of the service industry from 1.5 percent to 1.8 percent of gross receipts;
• adds another $1 per pack to cigarettes, and similar tax increases to other tobacco products;
• changes systems for taxing out-of-state firms that do business in Washington.

Taxes on soda, bottled water, sweets, beer and the service industries would expire in mid 2013, although a future Legislature could change that.

Even though the public and most legislators haven’t seen the tax plan in writing, some of those affected are fighting the inclusion of their product or industry…

WA Lege SpecSess: Will they gain or lose votes before Saturday

OLYMPIA — The Legislature did just this side of bupkiss in public Friday, to the chagrin of folks who bottle, distribute and sell soda, and some state employees hoping to make a point about layoffs.

A coalition of folks opposed to a proposed soda tax gathered on the steps of the Capitol this morning, hoping to make the most of media exposure before lobbying senators showing up for a full day of work.

But the schedule changed late Thursday and the Senate held only a pro forma session in which one Democrat and one Republican were on the floor for about 90 seconds until the gavel came down to go away and come back at 2 p.m. Saturday.

The House was also in pro forma, which is Latin for “we’ll get around to important stuff eventually”, and is also due back Saturday afternoon.

So the 50 or so soda pop tax folks out numbered visible senators roughly 25 to 1. (Heck, the number of reporters outnumbered visible senators by 2 to 1.) Sen. Karen Fraser, D-Olympia, who managed the floor for the majority party, insisted that lots of work was going on behind the scenes on budget and taxes.

Out on the steps, members of the anti-soda tax coalition insisted the new tax was unfair and would cost the state jobs. Ron Bradford of the Coca Cola Bottling operation in Spokane, said a fairer tax would be an increase in the sales tax.

“Overall, I think the people of Washington would accept it if this was a tenth of a cent or two,” said Bradford. The bottling operation has about 100 employees in production and distribution in Spokane, he said, but he’s not yet sure how many jobs would be lost if the tax went through.

The soda tax amounts to about 2 cents on a 12 ounce can, or 50 cents on a case. It’s really a double tax, Joe Gilliam, president of the Northwest Grocery Association, said because the tax goes on at the wholesale level, then is part of the amount subjected to the sales tax at retail.

He, too, argued the state should raise the sales tax, rather than pick from a menu of smaller taxes on soda, beer, bottled water, candy and gum

“It’s an issue of fairness,” Gilliam said. “Why should soda drinkers be more responsible for schools or prisons?”

The anti-soda tax coalition bought full-page ads in The Spokesman-Review and the Seattle Times Friday to drive home their point.As a counterweight, Rebuilding Our Economic Future Coalition , a group supporting the soda tax and other increases in the still-not-officially-released-because-we-might-not-have-the-votes tax package put up radio ads supporting it.

A group of state workers from the Department of Social and Health Services, which announced layoffs Thursday, planned a lunchtime march from their Olympia office to the Capitol, with hopes of sitting in the Senate gallery to help make their point. Before they were even close to the building, however, the pro forma session had opened and closed.

Anti-soda tax people said they’ll be back Saturday. So too, in all likelihood, will be squadrons of folks opposed to other taxes in the package. Could be an interesting four days, which is all the Legislature will have left in the special session. The opponents will be trying to peel off votes just as hard as Democratic leaders will be trying to add and hold them.

WA Lege SpecSess: From Tea Party to Soda Party?

OLYMPIA — Democratic leaders in the House and Senate may still be searching for enough votes to pass their “go home” tax package, but some of the would-be taxed aren’t waiting for them to get a head count and reassemble at the capital.

Bottlers, convenience store owners and others opposed to the tax on soda will be protesting at 10 a.m. on the Capitol steps. Won’t be many legislators around to watch. Day 26 of the “Seven-Day Special Session” is a pro forma day, with few of the honorables even around.

They’re scheduled to start up real legislative business Saturday at 2 p.m. It’s a late start to accommodate the travel back to Olympia from their respective homes, where most of them have been for more than a week while Democratic leaders passed tax proposals back and forth.

They’ve allegedly settled on the “menu” approach: taxes on bottled water, soda, big brewery beer, a B&0 hike for service businesses; no bump in the sales tax, no trimming or gutting the sales tax exemption for out-of-state shoppers, no new tax on specialized software, no bump in taxes for private airplanes.

The plan hasn’t been released to the public yet — still needs to be tweaked — legislative sources say, but enough of it has been leaked that those who are about to get new taxes are already torqued.

Verner says she won’t ask for tax increases to deal with 2011 deficit

Spokane Mayor Mary Verner says she’s not considering new taxes to bail the city out of its $10 million hole for 2011.

City leaders are getting an early start to the budget for the second year in a row and will present a preliminary budget plan to City Council by early May, Verner said in an interview this week. She said she is asking all departments to take an across-the-board cut of nearly 3 percent that will save $3.5 million and will unveil a plan in the coming weeks that will deal with the remeaining $6.5 million hole.

“Our work force will shrink this time around. There’s no way around it,” Verner said. “This year, there will be impact on services,”

Verner has ruled out raising utility taxes and says she doesn’t plan to ask voters for higher property taxes through a levy lid lift. That was part of Mayor Jim West’s strategy to help deal with significant deficits in 2005.

“I’m not counting on any increased on-going source of revenue,” Verner said. “One reason that I’m not counting on them is …  I don’t know if they’re going to be viable in this economic climate.”

WA Lege SpecSess: Tax committee being formed

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.

WA Lege SpecSess: House debates, passes tax plan

OLYMPIA – Using a compromise plan suggested by the governor, House Democrats stripped an increased sales tax out of plans to balance the state budget and countered with higher business taxes.

Saturday afternoon they voted 53-42 to stake out different territory in their efforts to combine tax increases with program cuts and federal money to fill a $2.8 billion budget hole.

The proposal got no support from Republicans, who called it at various times a job killer, legalized plunder and a pathway to socialism. It lost several Democrats, too, including Rep. John Driscoll of Spokane.

But Democrats who supported the bill said it was necessary to leave class sizes small, cover health care for the poor, keep guards in the prisons and state troopers on the highway.
Much of the package was proposed by Gov. Chris Gregoire late Friday in an effort to strike a deal between two very different tax approaches in the House and Senate. The two bills now become the basis for negotiations expected to take place over the weekend.

The House bill passed Saturday:
• Places a three-year surcharge on the business and occupation tax levied on many service businesses, raising the tax to 1.75 percent, up from 1.5 percent of gross receipts.
• Applies the sales tax to bottled water, currently classified as food and exempt from that tax. That tax would take effect May 1, in an effort to raise more money.
• Levies taxes on out-of-state companies who do business in Washington. Some of the language reinstates taxes thrown out by court decisions.
• Taxes manufacturers of custom software.

Cut from the tax bill are:
• The two-tenths of 1 percent sales tax increase approved Friday by the Senate.
• A sales tax to candy and gum, which the House approved in an earlier tax bill. Taxes on elective cosmetic surgery, also in that early House plan, are gone.
• An end to the real estate excise tax exemption on foreclosed properties. The  House and Senate both voted to do away with that earlier this month
To read more about the tax bill, click here go inside the blog

WA Lege SpecSess: Senate approves tax hike

OLYMPIA — TheSenate approved temporary jumps in state sales and business taxes, narrowly passing a tax plan that may not survive the weekend in the House.

Senate Democrats made some changes in the plan they passed during the regular session which also was gutted in the House. Instead of a three-tenths of 1 percent increase in the sales tax for the next three years, they approved a two-tenths of 1 percent increase for that period.

They approved temporary increases to the business and occupation tax, but also increased the credit for small businesses with sales of less than $72,000.

They also amended the bill to give exemptions from the business tax increases to researchers, non-profit hospitals and realtors.

Democrats emphasized that the tax increase was the smallest part of their budget solution, which also includes federal funding and cuts of some $5 billion from the budget they would have carried forward from the last biennium.

Republicans argued those aren’t all real cuts, but reductions in anticipated increases, brought on by overspending in previous  years.

Silver and…well…silver

Rep. Phil Hart, R-Athol, pitches his bill Monday morning to have Idaho create an official silver medallion that could be used to pay state taxes.

BOISE — Idaho lawmakers are backing a plan that would allow state tax bills to be paid down with silver medallions instead of cash.

Athol Republican Rep. Phil Hart’s bill approved Monday is intended to encourage the use of silver as a form of currency and reinvigorate Idaho’s silver mining industry, which has been in decline for decades. More.

Personally, I’d rather pay my taxes in pennies, but I can’t count that high. What do think of Hart’s proposed legislation?

Otter to WA biz: Come on over

OLYMPIA – Idaho Gov. Butch Otter is suggesting Washington businesses come over to his side of the border if taxes go up like they have in Oregon.
In a “love letter to our neighbors,” Otter argues that Idaho has a better plan than other states for handling the recession: “Predictable tax and regulatory policies are what our employers need in order to maintain their operations through this rough patch.”

 

WA Lege Day 55: Tax debate on Avon ladies

OLYMPIA — Sen. Val Stevens argues the tax falls unfairly on “direct sellers” like Avon ladies, and offers an amendment to strip provisions on the business and occupation tax changes out of that.

Sen. Rodney Tom, D-Medina, says she should read her own amendment, because she mentions sales taxes but the languages is about B&O taxes.

Stevens tries to close debate by suggesting Tom doesn’t understand basic economis.

Sen. Karen Keiser says it doesn’t affect Avon ladies, “it affects Avon, the multinational corporation.”

Amendment fails on a voice vote.

WA Lege Day 55: Tax debate begins

OLYMPIA — Opening salvo in the Senate debate over a package of tax increases to help ballot the state’s operating budget.

Sen. Don Benton, R-Vancouver, argues the whole bill is unconstitutional because it contains too many subjects. It’s logrolling, he contends.

This bill contains 21 different taxes and I don’t believe any one of these can stand on their own,” he says.

Senate Tracey Eide, D-Des Moines, counters the title of the bill is broad enough to cover everything in the bill.

Lt. Gov. Brad Owen, presiding over the Senate, breaks to make a ruling on Benton’s point of order: “The title properly reflects the content of the bill. Sen. Benton’s point of order is not well taken.”

Debate on amendments will begin.

WA Lege Day 54: Tax package out of committee

OLYMPIA – Despite warnings of wrath from voters in November, Senate Democrats moved a step closer to a vote on some $890 million in tax increases to fix the state’s budget hole.

The Senate Ways and Means Committee approved 12-10 a three-year increase in the sales tax and a series of changes to tax laws and loopholes designed to help fix a projected operating budget shortfall of $2.8 billion. They also are proposing cutting about $829 million in programs and using federal funds or transferring money out of other accounts to cover the rest.

The 21-part tax package would extend the sales tax to bottled water, cut exemptions for some equipment on wind and solar energy, raise the business and occupation tax on service businesses and raise taxes on out-of-state firms with representatives who sell directly to Washington customers.

Senate Majority Leader Lisa Brown, D-Spokane, said the full Senate could debate the tax plan as early as today.

It does not include a recent proposal to ask voters in November if they want to cut back on the sales tax in favor of an income tax on people who make more than $200,000 a year. That could come up in a separate bill before the Legislature adjourns Thursday – if it can gather enough support, Brown said.

“There’s time (to pass the income tax bill) but there has to be willingness in both houses. On that, I’m not sure,” she said.

For almost every part of the 21-point tax package, Republicans offered amendments to strip or pare back a new tax or restore an exemption, then had separate amendments to put each tax change on the November ballot for an advisory vote.

“I think it is important to let people know who is doing what to whom,” Sen. Mike Carrell, R-Lakewood, said in asking for an advisory vote on changes to rules that establish when an out-of-state company is subject to Washington taxes.

At one point, the arguments became so repetitive that Minority Leader Mike Hewitt, R-Walla Walla, merely said “Same speech, Madame Chair.” Chairwoman Margarita Prentice, D-Renton, ordered a vote, which got the same result, and the amendment failed.

WA Lege Day 54: Tax hearing recesses

OLYMPIA — Between Democratic confusion over how to treat tax exemptions for a coal fired power plant in Lewis County, and Republican amendments that demanded public advisory votes on practically every tax Democrats want to change, a Senate committee had to recess Friday afternoon without voting on the main tax package.

The Ways and Means Committee members had to return to the floor to vote on other items. Chairwoman Margarita Prentice said they’ll be back a half hour after floor action, which probably won’t be until this evening because of the rush to pass bills out of chamber before a deadline.

Stay tuned.

WA Lege Day 54: Talking taxes

OLYMPIA — Senate Democrats’ plans to raise taxes could move to the Senate floor over lunchtime.

The Senate Ways and Means Committee just began a hearing on a revised tax package that has some tweaks in the proposal released last week. Gone is the removal of the exemption for trade-in vehicles. But it still proposes raising the sales tax by three-tenths of a cent per dollar for the next three years. It does place a sales tax on bottled water.

It would raise about $805 million in new tax revenue.

Not included is the idea of offering voters to swap the sales tax increase, and another five-tenths of a cent, for an income tax on individuals making more than $200,000 a year or couples making more than $400,000. That bill got a hearing Thursday, but is separate from the overall tax package.

Some Republicans on the committee are sporting lapel buttons with “A.B.R.” which they said stands for “Anything But Reform” — their complaint that the budget raises taxes but doesn’t reform underlying problems with the state’s general fund budget.

1:20 p.m. update: Republicans are running a series of amendments to take out individual tax changes, or put them to an advisory vote on the November ballot. All are failing on party-line vote.

Senate Dems: Swap some sales tax for income tax on rich?

OLYMPIA — Senate Democrats may offer voters a choice of which tax they like better: a higher sales tax or an income tax on people making more than $200,000 a year.

With very short notice, the Senate Ways and Means Committee has scheduled a hearing this afternoon on a proposal to do just that. Raise the sales tax temporarily and have an automatic referendum for November. At that time, voters could decide to keep the higher sales tax or repeal the latest increase, plus another half cent on the dollar, and impose an income tax on so-called “high earners” — individuals who make more than $200,000 a year or families making more than $400,00.

Senate Majority Leader Lisa Brown, D-Spokane, broached the idea today on her blog. The committee had scheduled a two-hour hearing to start at 5 p.m., then reset that for a one-hour discussion at 4:30 p.m.

Brown said she sees this as a possible solution to closing an estimated $2.8 billion hole in the state budget with a balance of program cuts and tax increases. But she also supports the concept.

“I would personally feel good about it…I’m not saying it has got to be this way,” she said

To do this, they would have to first substitute this plan for another tax package by Sen. Rosa Franklin, D-Tacoma. Franklin said she supports the income tax as fairrer, and has had many letters and calls from constituents calling for the state to develop a fairer tax system.

“With an income tax, I see more stability,” Franklin said. “It can with stand the downturns better.”

Asked about the short notice for such a significant proposal with a week left to go in the 60-day session, Franklin replied: “Things happen fast around here.”

A Democratic Senate source also noted that while the bill may have to be pushed through at the end of the session, the public will have the summer and fall to decide whether it would prefer the income tax to a higher sales tax. Some Washington Democrats have been pointing to last month’s election in Oregon where voters approved tax increases as a sign the public might accept tax increases and restructuring if given the chance.

But Sen. Chris Marr, D-Spokane, isn’t sure that’s a good guidepost, and while he thinks it’s good to have the discussion on an income tax he does not support the plan.

“I didn’t like the sales tax (increase) and I like the idea of an income tax even less,” Marr said. “I question the willingness of the public to move in the direction of an income tax.”

Sen. Mark Schoesler, R-Ritzville, said bringing the bill up on short notice, near the end of the session, belies any suggesion of public involvement in the process.

“This is not open government, this is government by convenience,” Schoesler said.

Instituting an income tax requires a constitutional amendment, he said. Passing a bill with a bare majority and putting it to a referendum won’t withstand a court challenge.

WA Lege Day 51: Talking taxes. Voting taxes

OLYMPIA — A new tax proposal would place unfair burdens on janitors, cigar sellers, plastic surgeons, candy makers and lawyers, opponents of a House plan said today.

They’d also save vital services for schools, colleges, the poor and the sick, supporters of the proposal said.

They’re a good start, but they need to be bigger, said a third chorus of witnesses as the House Finance Committee held a hearing on the tax package announced less than 24 hours earlier. Click here to see a comparison of the House, Senate and governor’s tax packages.

With some minor adjustments, the committee voted 6-3 to send the proposal to the House for a floor debate, even though the Democrats who plan to vote for it today said it will change before it passes.

“This is not what will pass off the floor of the House,” Rep. Larry Springer, D-Kirkland said.

Republicans, who voted no, said no taxes should be raised at this point: “Our problem is spending, not revenue,” Rep. Cary Condotta, R-East Wenatchee said.”We have a certain amount of revenue to work with…We need to change direction.”

Among Republicans voting no was Rep. Kevin Parker of Spokane.

Further look at House Dems tax plan

OLYMPIA – People who smoke, chew gum, drink bottled water or get a face lift would pay more taxes this year under a plan by the House Democrats to find extra money to balance the state’s budget.

Lawyers, accountants and marketing specialists would see their taxes go up. So would airplane owners, anyone buying customized software.

Out-of-state shoppers would pay the same sales tax as Washington residents, and out-of-state businesses could face higher taxes under new formulas. But Washington shoppers would continue to pay the same sales tax they currently pay.

Those are some of the ways the chairman of the House Finance Committee, Ross Hunter, D-Bellevue, proposed Monday to raise an extra $758 million in taxes through June 2011 to help with the state’s $2.8 billion budget hole. The rest of the estimated shortfall would have to be covered with budget cuts, federal money and shifting money from other accounts.

Like Gov. Chris Gregoire and Senate Democrats, who previously released budgets that contain a mixture of taxes increase, program cuts and federal money,  (click to see comparison of all three)Hunter called it a balanced approach. But all three strike the balance differently…


WA Lege Day 50: House Dems propose taxes on candy, gum, bottled water, lawyers and facelifts

OLYMPIA — House Democrats will get a chance to help the state’s budget woes by putting a sales tax on bottled water, candy and gum and cosmetic surgery. Upping the business taxes on lawyers, accountants and marketing consultants. Repealing or reducing an array of tax exemptions or “loopholes.” And upping the tax on a pack of cigarettes by $1.

House Finance Committed Chairman Ross Hunter, D-Bellevue, released the long-awaited House tax package that raises $857 million in taxes, part of a combination of cuts, taxes and federal money that would fill the projected $2.8 billion hole in the state’s budget through June 2011.

The tax increases are a “menu” of changes, similar to Gov. Chris Gregoire’s proposal, rather than the three-tenths of 1 percent increase in the sales tax proposed by Senate Democrats. A list of the House proposals can be found here.

Hunter said he believes he can get to 50 votes — the bare minimum needed for a majority in the House — easier with his package than Senate Democrats can get to their needed 25 votes with their plan.

WA Lege Day 47: House budget moves without tax numbers

OLYMPIA — The House committee that oversees spending passed a Democratic plan to fix the $2.8 billion gap in the state budget Friday. But that bill had a gap of its own.

It calls for some $857 million in new tax revenue, but doesn’t specify where it comes from.

“We are the Ways and Means Committee, and this budget is going to require some new taxes,” Ranking Republican Gary Alexander of Olympia said. The ways to spend money are spelled out, but the means are not, he said.

Democrats acknowledged it was unusual to pass a budget without taxes in it, but that information will be added eventually.

“This is not the budget we’re going to vote on before March 11 — God willing,” Chairwoman Kelli Linville, D-Bellingham, said.

Budget writers are still trying to craft a package of tax increases that can get the needed support within their caucus.

“We don’t have a revenue package completed yet. I’m disappointed in that, too,” Vice Chairman Mark Ericks, D-Bothell said.But if the taxes were spelled out, he doubted  Republicans would have voted for it, anyway.

The House budget proposal moved out of committee on a 12-10, party-line vote.

Gregoire signs I-960 suspension

OLYMPIA – There was no drama, but plenty of theatrics, as Gov. Chris Gregoire signed a bill Wednesday making it easier for the Legislature to raise taxes.
Gregoire signed a 16-month suspension of some provisions of Initiative 960 as its prime sponsor Tim Eyman looked on, sometimes with a disapproving frown on his face, at one point holding his nose and pointing one thumb down.
“Now, you must behave,” Gregoire told Eyman at one point.
“I am behaving. This is my self-control,” he replied.

To read the rest of this story, click to go inside the blog.