Sales tax increase passes House committee, faces fight

Legislature: Opponents accuse lawmakers of targeting cuts to scare voters

BRAD SHANNON; The Olympian | • Published April 22, 2009

Comments (0)

OLYMPIA – A $1.1 billion sales tax proposal to pay for health care programs targeted by budget writers was kept alive another day Tuesday, passing on an 8-7 vote in a House committee.

Minority Republicans blasted the idea of even asking voters to consider the temporary, 0.3-cent sales tax increase, which would “buy back” some health care programs slated for cuts in the Democrats’ budget.

Initiative promoter Tim Eyman, who makes his living asking voters’ opinions, claimed it was emotional blackmail and legislative extortion even to put the measure on the ballot, saying he thinks lawmakers should make other budget choices.

Some Democrats are lukewarm to the idea too. Two Democrats, Reps. Mark Miloscia of Federal Way and Dawn Morrell of Puyallup, both voted in committee against putting the tax referendum on the Nov. 3 ballot. Miloscia said it doesn’t do enough, and Rep. Larry Seaquist of Gig Harbor, who voted for the package, said he thinks voters will reject it.

“I think our caucus is all over the board on that,” House Majority Leader Lynn Kessler, D-Hoquiam, said of the sales tax proposal. “So I couldn’t tell you that we’re going to pass it or we are not going to pass it. We need to have a real honest discussion about it.”

House Bill 2377 also faces challenges in the Democrat-controlled Senate, whose leader, Lisa Brown, hasn’t given up on an income tax. Brown is toying with a 1 percent income tax for people earning more than $250,000 a year.

House and Senate Democrats say they are close to wrapping up their work on a budget ahead of Sunday’s adjournment. In draft budgets, they would bridge the state’s projected $9 billion shortfall by making about $4 billion in cuts to programs such as public schools, universities, prisons and health care; federal economic stimulus aid covers an additional $3 billion; and one-time moves cover the remainder using fund transfers. They also are suspending cost-of-living raises for teachers and public employees.

The tax bill would raise the state share of the sales tax to 6.8 cents per dollar. The combined state and local sales tax is 8.5 cents in Olympia and 9.3 cents in Tacoma. It ranges from a low of 7 cents in some rural counties to a high of 9.5 cents in some parts of King County, according to the Department of Revenue Web site.

But because activists and Democrats say the sales tax hits the poor harder than the rich, the proposal includes a tax rebate for low-income earners. This Working Families Tax Rebate would be worth about $100 a year, on average, for the 370,000 families that qualify for the federal Earned Income Tax Credit.

Rep. Eric Pettigrew, D-Seattle, said his tax proposal is needed because people need help.

“This step is not a direct tax increase. It is part of maintaining our partnership with the public” and getting their opinion by putting it on the ballot, Pettigrew said.

Republicans held a news conference to decry the measure, where Eyman and a few small-business owners said they cannot afford another fee or tax.

“When my income goes down, I don’t continue to spend,” said Dave Gibson, owner of Express Employment Professionals in Lewis County. He said “the question of any tax increases to me does not make any sense.”

House Republican Leader Richard DeBolt of Chehalis said Gibson took a second job in a gas station so he wouldn’t have to lay off another worker at his company and called him the kind of voter he is working for in Olympia.

DeBolt also attacked Democrats’ motives, saying they are crafting their budget so it hurts vulnerable people and wins sympathy for a tax increase.

“They go out and they polled and polled and polled … until they found the most offensive, heinous cuts they could possibly take to the voters to scare them,” DeBolt said. “And then they are running it, because they know it frightens people. You don’t think that’s offensive? I find that offensive. That’s not leadership.”

Democrats have said they did no polls. But a coalition of labor, hospitals and other health care groups has done polling to show that a temporary sales tax measure has more than 50 percent public support.

Kessler and the top House Democratic budget writer, Rep. Kelli Linville of Bellingham, said DeBolt’s claims are not true. They said the tax package had not entered into the budget-writing teams’ discussions as they whittled down all three branches of government and also cut money for public schools.

“I just think that’s a very cynical view of what we have done. We have not done that,” Kessler said. “I guarantee we have not done that. … Because we will live with this budget, and we are very close to finishing it.”