Senate extends tax incentive for film companies

OLYMPIA – With signs emerging the Washington Legislature might at least make an effort to finish work by next Wednesday’s deadline, the Senate Thursday extended a tax break for movies made in the state but likely killed a plan to extend “tourism” taxes in Seattle.

Members of the House of Representatives, who had been told earlier in the week they wouldn’t be in session until next Monday, were given notice to report for work at 10 a.m. Saturday and expect to work through the weekend.

Work on a budget that can pass both chambers continues behind closed doors, but negotiators reportedly are closing the gap for different amounts of spending and savings over the next two years.

Senate Majority Leader Lisa Brown, D-Spokane, said it may be possible to achieve savings in the state’s workers’ compensation system without a controversial plan to offer injured workers 55 and older a voluntary settlement, known as compromise and release. The Senate has passed such a bill but House Democrats have so far refused to vote on it.

“What I support is a comprehensive workers’ compensation bill that helps improve the soundness of the system,” Brown said before attending a late-afternoon meeting with Senate Minority Leader Mike Hewitt, R-Walla Walla, and Gov. Chris Gregoire. “I’m not caught up on a specific provision.”

Minutes earlier, the Senate turned down a proposal to extend taxes on hotel and motel rooms and rental cars in King County first imposed in 1995 to build the baseball stadium that eventually became Safeco Field. Those taxes stay in place until bonds are paid off or 2015, whichever comes first. The bonds will be retired by late this year, and SB 5958 would have extended the taxes through 2015 to expand the state Convention Center in Seattle as well as spend money on Pioneer Square improvements, arts programs and affordable-housing projects in Seattle.

Critics said extending the taxes would convince voters of the adage, there’s nothing more permanent than a temporary tax. If voters want to extend the taxes, they can approve them through a ballot initiative, they added.

“We made a commitment to the people of King County and the state of Washington,” said Sen. Mark Schoesler, R-Ritzville. “Voters have to know that when we say a tax is going away, it really will go away.”

The bill received 24 yes votes; the constitution requires at least 25 votes to pass the Senate.

The measure could be brought to another vote if one of the 22 lawmakers who voted against the measure switches sides by today.

Earlier in the afternoon, the Senate extended tax incentives set to expire for companies that film movies and television shows in Washington.

Brown said the exemption was first approved in 2006, when all the surrounding states had tax incentives and Washington risked losing out to Idaho, Oregon and British Columbia.

Spokane-based North by Northwest was being lured to Boise because of tax incentives, she added.

“Spokane hosts several films a year,” she said. It often wins out over Seattle because of labor costs and the city’s willingness to close streets and let film companies reconstruct storefronts for productions.

Sen. Jeanne Kohl-Wells, D-Seattle, said 44 states offer such incentives, and the chance this incentive would disappear prompted one company to film the television series “The Killing” in British Columbia and Oregon, even though it is supposedly set in Seattle.

Sen. Rodney Tom, D-Medina, said in recent weeks some of the people supporting the tax incentive were calling for the closure of tax loopholes. “We’re opening up another loophole,” Tom said.

The bill now goes to the House.