Politics & Government

Bill to end tax breaks for big banks moves forward

State legislators had their first chance Wednesday to vote on a bill that would end tax breaks to mitigate painful budget cuts, and freshman Democrats in the House of Representatives said they’ll make sure it’s not the last.

Despite Republican opposition, some Democrats said they’re throwing their political weight behind a bill that passed out of the House Ways and Means Committee Wednesday to fund K-3 class-size reductions by ending a tax preference for banks, and they’ll do whatever it takes to get the controversial measure to a floor vote.

“I don’t think it’s a tough political issue at all,” said Rep. Laurie Jinkins, a Tacoma Democrat and the primary sponsor of House Bill 2078. “Are you going to give money to big banks who essentially drove us into the crisis we’re in or are you going to fund education?”

Jinkins and Rep. Chris Reykdal, another sponsor of the bill, said they would consider withholding their votes on a budget agreement if House leadership doesn’t bring the bill to a floor vote. If enough of the bill’s sponsors agree to do that, it could stall budget negotiations that have already dragged the Legislature into an overtime special session.

Reykdal, D-Tumwater, said he wanted to bring the issue to a head and make the bill’s opponents explain publicly why they thought keeping tax exemptions in place was so important.

“We want voters and the public to know that we do have options,” Reykdal said.

The proposal, which went through some changes before it made it out of committee, would end a tax preference that banks get on interest revenue from first mortgages, though it would only affect lenders that have locations in more than ten states.

That exemption was first enacted in 1970, and it was designed to reduce home prices and stimulate residential construction, according to the Revenue Department’s tax exemption manual.