Democrats dig in on tax referendum

By Brad Shannon | The Olympian • Published April 19, 2009

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House Democrats haven't given up on a tax referendum for the Nov. 3 ballot, and the 0.3-cent sales-tax plan could go to a committee vote in the next few days.

The tax package would raise more than $1 billion over three years and is aimed at blunting deep cuts to health-care programs. A hearing about the bill drew strong support Friday from a wide array of speakers representing hospitals, nurses, public-health groups and labor groups.

But those worried about cuts being written into budget agreements at the Capitol this weekend say services for the frail, elderly, disabled and working families could go away � even causing deaths � if a tax package is not passed.

Democratic Rep. Eric Pettigrew of Seattle, who sponsored the sales-tax measure, put it most bluntly of all Friday during a hearing on his proposal, House Bill 2377.

"People will die. ... If this is not in the interest of people to pass this (tax) piece, people will die," Pettigrew said. "There will be emergency rooms that will bulge, nursing homes that will bulge, people on the street and a lot of people who will not get served as a result of this."

Pettigrew's proposal includes a tax credit for low-income families that would average $125 in 2010 and $250 in 2011, piggybacking on the federal Earned Income Tax Credit for working families. That is meant to offset the hit on low-income people that a regressive tax on sales would have in a state that already puts a much higher burden on low earners than on high earners.

But the two-pronged bill drew criticism from the Association of Washington Business and professional initiative promoter Tim Eyman. AWB lobbyist Amber Carter called it "a public bailout of a government failure to address the budget deficit," and Eyman accused lawmakers of making selective budget cuts that hit the poor.

"It's become the oldest trick in the book: fund non-essential programs with existing taxes, then hold essential programs hostage, demanding a voter-approved ransom to get them back," Eyman said. "You regularly put emergency medical services on the ballot and tell voters, 'Approve this tax increase or you're all gonna die.' It is pure manipulation � it is transparent, obvious, and despicable."

Eyman went on to say there ought to be an "eighth ring" in hell reserved for politicians who would do such things. But at the same time, he did not say how majority Democrats could avoid cutting health, education and college programs, and Pettigrew objected to the attack.

"We do not put people on the railroad tracks to allow them to ... stop the train that is coming, which is unfortunately this terrible economic situation," Pettigrew said.

Budget writers in the House and Senate are working again today to complete a no-new-taxes budget that is expected to include deep cuts to health care, higher education and public schools. About 7,000 or more jobs in state government, universities and colleges, and public schools could be eliminated by the cuts.

An agreement needs to be reached soon to allow passage of a final budget by the April 26 adjournment date, and House Ways and Means Chairwoman Kelli Linville, D-Bellingham, said Saturday that the House and Senate were making good progress.

Backers of the 0.3-cent tax proposal include Leo Greenawalt, chief executive of the Washington State Hospital Association. The association has been part of the coalition that includes nurses and other labor groups that hired a pollster to see what tax package might fly with voters.

Greenawalt told lawmakers he has seen a remarkable "10 percent of the businesses in this state drop health insurance" in the past year, which means hospitals have fewer ways to shift costs as they get more and more non-paying customers. In the last three months of 2008, Greenawalt said, "over half" of the state's hospitals were losing money, and some already laid off employees.

The situation at hospitals could get worse as the state cuts the number of people it covers with health insurance and also cuts subsidies for hospitals, whose emergency rooms become clinics of last resort for those who have no insurance.

"All of us ... are going to find it difficult to get into a hospital," Greenawalt predicted.

Hugh Ewart, chief executive for Seattle Children's Hospital, said he also supports the bill, because the hospital is facing $60 million in cuts to aid. He said dental, psychiatric and in-home nursing programs all would face reductions or elimination under the cuts. And wait times would grow for other services, Ewart said.

Diane Sosne, president of Service Employees International Union, Health Care 1199NW, said cuts to health care and mental-health programs "will tear apart the basic health safety net." Cuts will lead to more mothers bringing babies to emergency rooms for care that should have been provided earlier, and more mentally ill people will show up in prisons, jails or under bridges "costing us more in the long run."

And Sofia Aragon of the Washington State Nurses Association warned that the cuts harm public health programs around the state.

Among cuts proposed in the House budget are elimination of funds for vaccination programs, which public health programs often provide.

Jessica Field, a caregiver at a Tacoma facility that tends to dementia patients, said staffing ratios already are high, so a reduction in the state's contribution toward nursing homes scares her.

"We need to do everything possible to protect our senior citizens who have no one to help them but us," she said. "We're going to have more falls, more injuries; we're going to have more patient-to-patient incidents."

The proposal championed by Pettigrew would raise about $1 billion over three years, but it only buys back a portion of the cuts outlined for the Basic Health Plan, which subsidizes health insurance for low-income workers. It appears to replace only a portion of the money cut for other programs, too.

The tax measure faces plenty of legislative opposition, most of it from Republicans but some from Democrats who don't like the sales tax. In a bid to answer that concern, the proposal has the tax credit modeled after the federal Earned Income Tax Credit; the Legislature last year set up its own Working Families Tax Credit to piggyback on that federal tax, providing up to $125 next year and $250 in 2011, if the tax package were to pass.

Sen. Joseph Zarelli, the Senate Republicans' lead voice on budget issues, was quick to question why Democrats needed to go to voters at all.

Zarelli challenged Democrats' over their choice of spending cuts. He offered amendments to the budget bill in the Senate Ways and Means Committee last week that would have cut the state's contribution to employee health-care premiums to pay for programs giving health care to the needy, but Democrats rejected his ideas.

GOP lawmakers also asked the Democrats to scale back spending on the General Assistance Unemployable program that gives health care and $339 monthly stipends to those deemed unemployable; they also want to scale back the Basic Health Plan, which subsidizes health-insurance coverage for the working poor.

Democrats have proposed to eliminate up to 45,000 slots in the Basic Health Plan, but the tax package would restore about 40,000 of those slots.