OLYMPIA — Stifled by the two-thirds majority vote required in the Legislature to raise taxes, supporters of ending certain tax breaks are looking to other options as the end of the legislative session nears.
A labor union member has filed several versions of two initiatives with the Secretary of State’s office, all of which propose closing tax loopholes to pay for education and social services.
Sending out an initiative to the public might be the only way to get around Initiative 1053, which voters overwhelmingly approved last November. Under I-1053, any change or increase in taxes must be approved by a two-thirds majority in both houses of the Legislature — or by a vote of the people.
Democratic legislators in both houses have introduced their own bills to close some of the exemptions, but without support from their Republican counterparts, they aren’t likely to go anywhere. Democrats hold a 26-23 majority in the Senate and a 56-42 majority in the House — not enough for a two-thirds vote.
Washington currently has more than 550 tax exemptions on the books, which total $98.5 billion per biennium. Mike Gowrylow of the Department of Revenue said about $14.8 billion of that could be repealed to gain revenue for the state.
A review committee established five years ago has been examining the tax breaks and making recommendations to the Legislature about which to keep and which to eliminate, but so far the Legislature has only allowed a few to expire.
It’s not the broad sales tax exemption on food that the initiative supporters are after. In their proposals, unions and community groups say they’ve targeted tax breaks that benefit a small and wealthy sector of Washington’s population.
“There are a lot more middle class working and low-income families in the state of Washington than there are the elite, and I think they will understand we have to have these initiatives to close the tax loopholes and make the wealthy pay what they need to pay,” said Judy Harris, one of the members of the Service Employees International Union who was down in Olympia for a rally last week. “They can handle it.”
Harris is part of a group that’s facing deep cuts if the budget proposals go through: She is a long-term caregiver for a man who’s been disabled by severe burns across most of his body, and if the proposed 16 percent cut to home care workers takes effect, her lost working hours will hurt both her and her client.
One of the two initiatives filed focuses on restoring state money for increased training for home care workers, which is required under an initiative passed in 2008.
The other initiative focuses on restoring money for low-income health care — like the Basic Health Plan, which has been nearly gutted by the Senate budget proposal — and education.
The tax breaks targeted include the sales tax exemption for out-of-state shoppers, the use tax exemption for private jet owners and other sales tax exemptions on a host of services.
“It makes no sense that we charge a sales tax on our own residents, in some cases as high as 10 percent in King County, and then let people who come in from out of state off without paying a dime,” said Sandeep Kaushik, a spokesman for the Economic Future Coalition, which is sponsoring the initiative. “There’s a basic fairness issue about how our tax system works here.”
Even with I-1053 in place, some legislators are trying to work around the tax standstill. Kaushik said he was encouraged by the number of bills introduced by Democrats in both the House and Senate that would eliminate tax breaks.
Last week, thousands of demonstrators from labor unions across the state swarmed the Capitol, chanting for the government to cut tax breaks to corporations instead of cutting services to the people.
The Democrats behind the tax break bills said the protesters reflected their own beliefs that I-1053 was not understood to apply to eliminating tax exemptions. Senate Ways and Means Chairman Ed Murray, D-Seattle, hopes to test that theory by putting a referendum to the voters to ask whether the two-thirds requirement should extend to repealing, reducing or modifying existing tax breaks.
But Democratic Gov. Chris Gregoire and minority Republicans in the Legislature say they’ve been hearing a different message from the people.
“Nobody is asking me to raise taxes,” Gregoire said in a press conference after the Democrat senators released their bills. “Yes, the demonstrators, they are, but when I’m out there with the rank-and-file people, that’s not the message they give me.”
