Business Interests Weigh Possible Tax Initiative Group Wants To Roll Back ‘93 Increases And Says Initiative ‘Very Viable’

Business interests stung by tax increases want to roll them back, and an initiative to the 1996 Legislature may be their method of choice.

“It’s under active discussion and a very viable possibility,” said Elliot Swaney of the Building Industry Association.

“It’s something we are interested in that would benefit both small businesses and homeowners. It’s a populist issue.”

A coalition of business interests will decide whether to launch a tax rollback initiative within 10 days, said Cliff Webster, an Olympia lobbyist.

The Taxpayer Relief Now Coalition, formed during the 1995 session, includes Realtors, builders, small businesses, insurers, bankers and other businesses hit in 1993 with increases as high as 66 percent to their business and occupation tax rate.

The 1995 Legislature passed a bill granting a 50 percent cut in the increase, but Gov. Mike Lowry vetoed the bill.

Lowry also vetoed a 5 percent cut in the state share of the property tax.

The tax cuts would have cost nearly $270 million, which Lowry said was unaffordable.

Businesses, furious at the vetoes, have talked about veto overrides and reintroducing the tax cut bills when the Legislature reconvenes in January.

The coalition now also is evaluating an initiative to reverse the vetoes.

The governor can’t veto an initiative passed by the Legislature. And it can pass by a simple majority vote, instead of the two-thirds vote required to override a veto.

“It’s got great appeal,” said Webster, a lobbyist for the state association of architects and engineers.

“What we are looking at is how do you avoid the governor,” said Carolyn Logue, lobbyist for the state chapter of the National Federation of Independent Business. “An initiative to the Legislature does that.”

Webster expects broad support for reducing the business and occupation tax hikes.

The tax increase was imposed on a variety of businesses, including architects, engineers, lawyers, doctors, computer services, bankers, accountants and consultants.

The increase has been “onerous” for small business and independent contractors, said Glen Hudson of the Association of Realtors.

“The average real estate agent who works full time makes $31,000 a year. For them to take an extra chunk out of their commissions for this tax hurts.”

Bruce Koppe of the state bankers’ association said the Legislature was “right on target” when it passed the cuts, and bankers felt “put upon” when Lowry vetoed them.

“If the coalition decides to do an initiative, we’ll be on board.”

Support in the business community is not universal. Don Brunell of the state Association of Washington Business said he wasn’t aware an initiative was under consideration.

The business group supports cutting the business and occupation tax increase, but doesn’t see much benefit in the property tax cut, which would reduce the annual tax bill on a $100,000 house by $18.

“We would rather see the money applied to reducing the business and occupation tax, which would benefit all businesses.”

Lowry maintains his policies have been good for business. The state Council of Economic Advisers reported this week that job growth in Washington stands ahead of the national average. The council also is expected to forecast a $40 million upturn in revenue collections.

But Lowry said downturns at the Boeing Co., layoffs at Hanford, and an expected move by Congress to push the cost of federal programs onto the states all add up to an uncertain economic picture.

, DataTimes