Tax or fee?
The difference between a tax and a fee isn’t always clear in Olympia, but here’s how the Washington Policy Center, a Seattle-based conservative think tank, describes each:
Tax: Applied uniformly in a taxing district, a tax raises revenue for general use or public benefit.
Fee: Applied to someone receiving a specific service, a fee offsets the cost associated with running or regulating that service.
By the numbers
188: Bills the Office of Financial Management notified the public about.
82: Legislators who introduced bills to raise taxes or fees.
$6.2 billion: 10-year revenue projections, had those bills passed.
35: OFM-flagged bills that passed in the Legislature.
At least $3 billion: 10-year revenue projections for those 35 bills.
$33.6 billion: Size of the 2013-2015 budget.
Despite many legislators' public aversion to raising taxes and fees this year, Washington lawmakers proposed more than 180 bills to do just that, according to information kept by the state's Office of Financial Management.
About 7 percent of the 2,492 measures introduced in 2013 would have raised taxes or fees. Those proposals came from Democrats and Republicans alike, and from several legislators representing Clark County.
Most of the bills in question impose fees on members of a particular industry, or other groups, such as vehicle owners or outdoors enthusiasts. Had all of the proposals passed, they would have raised at least $3 billion in new revenue in the next decade.
This year, one of the largest tax or fee bills to pass was determined by OFM to raise at least $1 billion in the next 10 years. The measure, which was included in the operating budget, adds a tax on hospitals to pay for Medicaid hospital services. Medicaid is a health-care program for the poor.
Tax and fee bills also trigger a voter-mandated analysis, and a public notification process. Because Washington voters approved Initiative 960 in 2007, the Office of Financial Management is required to examine each bill a legislator introduces and determine whether those measures would result in a new tax or fee. If so, OFM must send a notice through a public email list and include a 10-year projection of the bill's cost to the would-be tax- or fee-payer.
Not surprisingly, the legislators who introduced the most tax or fee measures this year sit on a budget-related committee. Topping the list, Senate Ways and Means Chair Andy Hill, a Republican from Redmond, introduced seven of proposals to raise taxes or fees. So did House Finance Chair Reuven Carlyle, a Democrat from Seattle.
Closer to home, Sen. Don Benton, R-Vancouver, and Rep. Jim Moeller, D-Vancouver, each introduced four bills that were flagged by OFM.
In Benton's case, only one of those four proposals became law. That measure created a military veteran designation on driver's licenses and identification cards. The veteran may be required to pay a fee for receiving the special designation, but that fee cannot exceed $2, according to the bill. OFM estimated that the fees will bring in about $466,000 in revenue during the next 10 years.
Benton's other three bills would have: required drivers to get a $75-a-year permit to use studded tires; allowed the state to collect new statistical information and a new fee from title insurance agents; and created a fee for financial institutions. That last fee would have covered the cost of new state oversights on financial institutions.
Likewise, just one of Moeller's four fee-raising bills passed through the Legislature. Moeller's successful bill created a new type of alcohol license so small movie venues, such as Kiggins Theatre in downtown Vancouver, can serve beer and wine in their auditoriums. Theaters would pay a yearly licensing fee of $400.
What didn't pass was Moeller's proposal that lobbyists file their disclosure documents online and pay a filing fee of up to $200 a year. His bill to create a Yellow Dot Program for drivers with special medical needs also failed. That bill would have let those drivers pay a fee to place a decal on their car. If there was an accident, the sticker would alert emergency responders to check the glove box for the driver's medical information.
The third fee-raising bill of Moeller's that didn't pass was requested by the state Department of Transportation. It would have created a fee for advertisers who buy billboard space along state highways, and the fees would have helped cover the cost of regulating those billboard ads.
"I think it makes sense that people who get a service then pay for that service with a fee, and I don't see a problem with that," Moeller said.
Sen. Ann Rivers, R-La Center, and Rep. Liz Pike, R-Camas, each introduced two bills that spurred OFM notifications. Rep. Sharon Wylie, D-Vancouver, introduced one. Sen. Curtis King, R-Yakima, introduced three. King represents the 14th Legislative District, which includes portions of eastern Clark County.
Rivers' idea to create a license and fee for Christmas tree growers became law, while her proposal to create taxes on the medical marijuana industry will be reintroduced next year. Wylie's bill, which didn't pass, would have increased vehicle licensing fees while also doing away with the requirement that vehicle owners change their licence plates every seven years.
Pike's bill to allow school boards to arm willing and able teachers with guns -- a proposal that failed this year -- would have created a fee to cover the cost of gun training. Pike also introduced a bill to make electronics manufacturers pay a disposal fee toward the state's E-Cycle electronic recycling program. That bill's Senate companion passed through the Legislature.
King, co-chair of the Senate Transportation Committee, introduced the governor's transportation budget in the Legislature, prompting an OFM notification. He also introduced a companion to Moeller's billboard advertising bill, at the request of the Department of Transportation.
Additionally, King introduced a bill to create a $15 studded tire fee and a commercial driver license fee, which would cover the cost of new skills exams. None of those bills passed.
I-960 costs, benefits
The I-960 analysis and notification process cost the state at least $48,735 this year, Kate Lykins Brown, a spokeswoman with the office, said. That dollar amount includes the salaries and benefits of four part-time workers, but it doesn't include the amount of time that information technology, legal or administrative staff might spend on assisting with I-960 compliance, she added.
"It's a good transparency notification for people to have," said Jason Mercier, director for the Center for Government Reform at the Washington Policy Center. He said the notifications are especially important because sometimes bills are proposed with little time for citizens to review them ahead of a public hearing.
The I-960 notifications "makes it easier to come with the information needed to participate in those public hearings," Mercier said. He also said the public should place more weight on how legislators vote on taxes or fees, rather than whether they introduce bills that raise them. Sometimes legislators are simply trying to start a policy conversation, while others introduce legislation as a courtesy to the governor or a state agency, he said.
This year, the I-960 listserv had about 1,500 subscribers, and OFM sent out about 700 notifications using the listserv. For more information, or to become a subscriber of the email list, go online to http://ofm.wa.gov/tax/faq.asp.
I-960 also required that tax proposals receive a two-thirds majority to pass in the House and Senate. That part of the initiative was suspended in 2010 and struck down by a state Supreme Court ruling in February.