Oregon tax vote spurs interest here

Gov. Chris Gregoire and top Democrats in the Legislature warmly welcomed Oregon's vote Tuesday that upheld more than $700 million in tax increases on high earners and businesses, while Republicans discounted it.

Leaders of the two parties at the Washington state Capitol disagreed on the significance of a pro-tax public vote as they look to close a $2.6 billion budget gap. Democrats want to close tax loopholes and possibly raise general taxes, but they’ve been unwilling to give details on ways to make that happen.

And if the Oregon vote encouraged Democrats to act boldly – as Democratic state Sen. Craig Pridemore of Vancouver urged – leaders were not letting on. They instead expressed satisfaction and relief in seeing voters uphold a revenue package aimed at blunting program cuts in the economic downturn.

“It’s not changing our direction. It’s just heartening to know that other people have gone through it and done a pretty good job of having a dialogue with the public about how important public schools are and deserving of funding,’’ House Speaker Frank Chopp, D-Seattle, said in a briefing with reporters.

“What I take away from it is that if you come up with common-sense solutions to meet the priorities of the people, the people will sustain you,” Chopp added. “So we are very pleased with that vote. They have a different tax system than we do, so it’s not exactly the same, obviously. But I think when people are faced with making a choice they’ll make it in favor of common-sense investments in our values, programs like public schools and health care.”

Chopp also said a proposal to amend Initiative 960, which requires a two-thirds supermajority vote to pass tax increases, could emerge in the next week or two, and he thinks the public will support the concept, which presumably will include a simple-majority requirement to increase taxes or repeal tax exemptions this year. But he gave no details.

Republicans brushed off the vote as a sign that voters might tolerate higher taxes. “We remain committed to working on a budget that is balanced without additional taxes,’’ House Minority Leader Richard DeBolt, R-Chehalis, said. “I didn’t read too much into the Massachusetts win (Republican Scott Brown winning the U.S. Senate race), because it’s nine months from the election. I don’t read too much into this one.

“Oregon is a very different state than we are. You know, they might be more socialist or whatever-you-want-to-call-it than we are,” DeBolt added.

Senate Minority Leader Mike Hewitt, R-Walla Walla, agreed. “I don’t think they’ll go for this (in Washington). I think Massachusetts put a scare down the backs of Democrats … I think they better be cautious about what they do,’’ Hewitt said.

Several taxes are known to be under consideration by legislative Democrats: an excise tax on owners of private airplanes, a tax on bottled water, a tax on candy and gum, a $1 per pack increase in cigarette taxes, closure of tax breaks for gold bullion dealers and closure of a tax break inadvertently created by a court ruling for certain out-of-state food wholesalers. Lawmakers have not ruled out a limited increase in the sales tax.

A Gregoire statement said, in part: “Oregon voters met the challenge of these difficult times and clearly said that schools, health care, public safety and other essential services cannot be forsaken.”

But the Democratic governor gave no hint if it would embolden her revenue plans. She is proposing $780 million in new revenue, largely from closing tax breaks or incentives, but she has given almost no details and won’t divulge them until after the Feb. 12 revenue forecast. She also says she wants to reduce her state revenue requests by whatever amount of federal help the state gets.

In the Senate, Majority Leader Lisa Brown, D-Spokane, put out a statement saying the results do not change her caucus’s belief in a middle-ground strategy that avoids an all-cuts or all-taxes approach to cover the gap.

“I think the Oregon result does highlight that voters support public services, but they’re also sensitive to the question of who pays for them. I believe the sentiment Oregon voters expressed about limiting the impact of a revenue increase on working families is as strong here in Washington as it is down there,” Brown said. “Like in Oregon, I think Washington voters would also want to see what specific services they’re protecting, such as early learning and classroom size and financial aid, with that new revenue.”

Brown said she also still believes “in having a discussion about tax reform,” which to her has included an income tax or some kind of tax on high earners – which Oregon has but Washington does not. “I think it’s a discussion that Washington needs to have, both on the business side and the personal finances side of the equation. But I also think it’s a multi-year discussion, and the success of any reform proposal will require a strong grass-roots element,” she said.

Brown’s fractured caucus will feel pressure from its more progressive members, such as Pridemore, who want to repeal tax breaks for corporations to pay for school and health care programs.

“If neighboring Oregon lawmakers and voters can step forward with a bold plan that addresses critical needs, then there is no reason Washington cannot do the same … .” he said. “We shouldn’t leave this legislative session with making serious progress toward funding K-12 education, shoring up our health care system, and investing in workers and families hurting in this recession.”

Brad Shannon: 360-753-1688

bshannon@theolympian.com

www.theolympian.com/politicsblog