Lt. Gov. Brad Owen made an important clarifying decision in the state Senate that has ramifications for the Legislature’s treatment of tax-law changes this year. In a nutshell, Owen found Monday that majority Republicans’ rule — which required a two-thirds supermajority vote in the Senate to approve new types of taxes – was unconstitutional.
Senate Majority Coalition Caucus leaders have still not decided whether to challenge Owen’s ruling, and it’s not clear how they will be successful. Owen based his ruling in part on a Supreme Court decision in 2013 that threw out the two-thirds vote requirement in one of initiative promoter Tim Eyman’s ballot measures.
A few things are clear after the ruling. First, it frees lawmakers’ hands slightly to write and pass a balanced budget – with less chance of gridlock.
Second, the Senate Majority Coalition Caucus, which consists of 25 Republicans and one Democrat, adopted the rule as a way to block two of Gov. Jay Inslee’s proposals but also send a general message against taxes.
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Inslee wants to enact a tax on capital gains for the state’s most wealthy; he also seeks to impose a pollution fee for greenhouse gas emissions using a cap and trade system like those in California and British Columbia.
The public supports both concepts, according to polling by Elway Research.
Also clear is that Inslee and supporters of a capital gains tax or price on carbon emissions face a steep political climb if they want to pass those measures in the divided Legislature – even with a simple majority requirement of 25 Senate votes and 50 House votes.
House Democrats have not showed how committed they are to raising revenue. But House leaders have said there is need for additional revenue to boost state investment in public schools due to a Supreme Court ruling in the McCleary case; there also are unmet needs in programs and worker compensation to deal with after the Great Recession cuts.
In adopting its rule, the Senate majority unwittingly revealed its acceptance of Washington’s terrible tax system, which is the nation’s worst in terms of burdening those least able to pay and also burdening businesses.
An analysis last year by the business-backed Washington Research Council also found Washington’s state and local government tax burdens are the eighth heaviest among the states – mainly because of a reliance on sales taxes and a business occupations tax on gross receipts, not profits.
Without a major new source of state tax revenue – like the modest capital-gains tax that Inslee suggests on the most wealthy 1 percent – those tax imbalances won’t begin to change.
As Inslee spokesman David Postman wrote in January: “Senate Republicans changed the rules to send a message to the very, very wealthy that says, ‘Don't worry, we've got your back.’ And the message to every other Washingtonian is that they don't deserve the same treatment as the very wealthy.”
That might be true. A more benign interpretation is that Republicans in the Senate were sending a general message about disliking taxes, and they targeted Inslee’s two proposals as a compromise between moderate and strident anti-tax voices in their caucus.
Time will tell.