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Bill proposes penny hike in the state sales tax

• Published February 11, 2010

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Majority Democrats’ smorgasbord of tax proposals at the Legislature just got a main dish.

Rep. Dennis Flannigan of Tacoma and 14 other Democrats introduced a bill today that adds a penny to the state’s 6.5 percent share of the sales tax, then phases out the extra tax as jobless rates improve.

Eighty-percent of the proceeds would go into the general fund, 17 percent into a transportation construction account that can pay for job-generating projects, and 3 percent for public transportation.

The proposal could raise “in the neighborhood of $1 billion,’’ said Rep. Sam Hunt, D-Hunt, one of the co-sponsors. “I am open to looking at all revenue options,’’ Hunt said.

The tax surcharge would be halved to 0.5 cents once unemployment falls to 6.5 percent or less for four continuous months and is eliminated when unemployment falls to 5 percent for four straight months.

“The additional funding will keep people working, strengthen the safety net for citizens by providing vital needed services, and adding jobs as the economy begins to rebound through investing in the state's economy and infrastructure,” the bill states.

How far House Bill 3183 might get is another question. House Democrats were unable to get more than 30 votes for a temporary sales tax increase of about 0.3 cents last year, but this one has a phase out tied to the jobless rates.

“It’s the old question: What can you get 50 votes for,’’ Hunt said.

Jason Mercier of the right-of-center Washington Policy Center spotted the bill and warned that a penny sales tax increase “could cost 15,000 Washingtonians their jobs.’’

That estimate of job loss likely didn’t take into account the economic stimulus that Flannigan’s use of funds for transportation jobs might have.