Politics & Government

Senate Republicans fail to force vote on the governor’s capital gains tax

The state Legislative Building in Olympia is shown in this file photo.
The state Legislative Building in Olympia is shown in this file photo. The Olympian

Republicans who control Washington’s Senate fought to hold a floor vote Tuesday on a new capital gains tax proposed by Democratic Gov. Jay Inslee, even though they are against it.

The GOP leadership wanted to use the vote as a negotiation tactic to force Democrats in the Legislature to say whether they support taxing capital gains to pay for expected education reforms.

Democrats blocked the attempt with parliamentary procedure, and later called it a waste of time and a political ploy without meaning.

But Republicans said the back-and-forth helped show Democrats have been agitating for a capital gains tax but don’t actually want to approve one. That helps Republicans narrow down the ways Democrats want to pay for education, said state Sen. Joe Fain, the Republican floor leader.

“We can only interpret it as they’re not interested in a capital gains tax,” said Fain, R-Auburn. “Which is fine. We’re not interested in one either.”

Democrats, who control the House, have called for $7.6 billion over the next four years to meet the state Supreme Court ruling known as McCleary. In the case, the high court said the state needs to pay the full cost of teacher and school employee salaries that are now partially supported by local levies.

But the Democrats haven’t proposed any taxes to pay for their plan.

The Senate’s Democratic Leader Sharon Nelson said Tuesday’s tax hoopla was distracting from more important issues in the Senate. Democrats don’t want to rule out a capital gains tax to pay for McCleary, she said, but don’t want to vote for it until the Legislature agrees how to meet the court’s ruling.

“We try to continue to redirect (Republicans) to governing versus pulling stunts, and it is not being as effective as I would hope,” she said. “In the end game, I would have to look at what revenue options there are, what kind of cuts they propose.”

The GOP has proposed spending $6.9 billion in the next four years. That money would mostly come from a new statewide property tax that would replace local levies. The plan relies on $800 million in savings per year that hasn’t been identified yet, however.

Inslee’s capital gains tax is part of a budget proposal that would generate $5.5 billion in new taxes in the next two years that would mainly go to education. About half of that revenue would come from the capital gains tax and a tax on carbon emissions.

Republicans have threatened to bring Inslee’s carbon tax to the floor, too, along with his proposal to raise $2.3 billion dollars in the next two years by increasing the business and occupation tax for service businesses from 1.5 to 2.5 percent.

Walker Orenstein: 360-786-1826, @walkerorenstein