Gov. Inslee says extending taxes not an increase

OLYMPIA — Gov. Jay Inslee, on his first full day in office Thursday, said he may support extending two taxes set to expire in June if it helps balance the budget or satisfy a court order to better fund public schools.

And Inslee, a Democrat, rejected the idea that by continuing a tax on beer and a surcharge in the business and occupation tax for certain services that he is violating a campaign pledge to not increase taxes.

“I do not believe we would be increasing taxes if we extend the existing tax rates in that regard. And the reason I believe that is it’s true,” he said at a news conference.

“They do not raise taxes on people over the existing level that in fact are being paid today,” he said. “Since they do not increase taxes, they’re not a tax increase. That’s a numerical, mathematical conclusion that Huskies and Cougars, no matter where you went to school, can agree with on a mathematical basis.”

Jason Mercier, director of the Center for Government Reform of the Washington Policy Center, disagreed.

“Under state law, breaking the promise to sunset those temporary tax increases would qualify as a tax increase and trigger the protections of the state’s supermajority for taxes law,” he wrote in an email.

“While the governor did not officially commit to breaking the promise made to those currently subject to these ‘temporary tax increases,’ extending them would qualify as a tax increase under the law and run afoul of what the voters were promised,” he wrote.

On June 30, a 0.3 percent increase to the business and occupation tax paid by lawyers, accountants and others and a 50-cent-per-gallon tax on beer are scheduled to expire. Lawmakers approved the temporary increases in 2010 to help plug a budget gap.

Keeping them in place could bring in around $635 million in the next two-year budget.

Former Gov. Chris Gregoire called for extending the taxes in her final budget proposal which went to lawmakers in December.

She also proposed higher taxes on gas, soft drinks, candy and gum in order to fill a projected $900 million deficit and avoid further spending cuts by state agencies.

Inslee last month did not embrace any of the revenue ideas.

“Gov. Gregoire’s budget reflects the seriousness of the challenges ahead and Gov.-elect Inslee appreciates her thoughtful effort and determination to address Washington’s fiscal reality,” he said in a prepared statement at the time. “The upcoming legislative session, Gov.-elect Inslee will lay out his own budget priorities that reflect his vision for state government and his commitment to create a lasting economic recovery with secure jobs for Washington’s middle-class.”

Jerry Cornfield: 360-352-8623; jcornfield@heraldnet.com.

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