OLYMPIA — Lawmakers are moving closer to suspending tax-limiting Initiative 960, something that majority Democrats need to do as they prepare to release their budget proposals.
After a more than three-hour hearing Saturday, the House Finance Committee voted 6-3 to approve the measure that removes the requirement that two-thirds of the Legislature approve any tax increase. It could be on the House floor in the next few days.
Rep. Larry Springer, D-Kirkland and a member of the committee, said that the temporary suspension “gives us some tools right now to address the most severe economic downturn this state has ever faced.”
Earlier this week, on a 26-22 vote, the Senate voted to amend the initiative, which was approved by voters in 2007. I-960 requires that two-thirds of the Legislature approve any tax increase, a significant hurdle compared to the simple majority approval needed for other bills.
The Senate endorsed suspension of that rule until July 2011, when the next two-year budget cycle begins. It’s a move majority Democrats said they needed to make as they deal with patching a budget deficit now pegged at $2.8 billion.
Senate Democrats are expected to unveil their budget proposal late next week, followed by the House.
Democratic lawmakers plan to increase taxes and cut spending to balance the state’s budget deficit, but they don’t have enough in their majorities to get a two-thirds vote in either the Senate or House.
Opponents said they worried that suspension of the initiative leaves the door wide open for tax increases.
“If you continue to increase revenue and put it on the back of the residents of this state, when will it end?” asked Jeff Eindbender of Enumclaw, who wore a shirt that read, “The business of government is to uphold the vote of the people.”
But others argued that state programs for vulnerable populations have already been cut too much.
“Another all-cuts budget is not ethical or moral,” said Christine Johansen, with the Washington state Coalition for the Homeless.
The House committee restored one aspect of the initiative that the Senate had removed, adding back e-mail notifications sent to the public about proposed tax increases, including 10-year cost projections of the measures. The committee did not restore the part of I-960 that requires a nonbinding advisory vote by the public on taxes passed by the Legislature.
Lawmakers can amend initiatives with a simple majority vote after they’ve been on the books for two years, making this the first legislative session that lawmakers could suspend I-960.
The changes to I-960 must clear both chambers and be signed into law by Gov. Chris Gregoire before lawmakers can move ahead with tax-raising votes. Gregoire is expected to approve the Legislature’s plan.
The Finance Committee on Saturday also heard testimony on a revenue-raising measure that would make changes to the current tax code, including ending the sales tax exemption for out-of-state residents from states with no sales tax, like Oregon.
The measure makes several other changes, including extending the state’s business and occupation tax to some out-state-businesses that have a certain level of activity in the state, bringing in an additional $73 million through 2011, and $375 million between 2011 and 2013.
It would also tax people who buy private airplanes the same as those who buy boats. Currently, private aircraft owners pay a flat fee based on engine type or size, while boat owners pay a .5 percent tax on the value of the boat. That could bring in more than $35 million through 2013.
It also repeals a sales-tax break to some companies based outside Washington, following the state’s loss in a recent court case with Dot Foods that cost the state about $118 million.
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