House Democrats set the stage to sue voters

While the main focus of the just concluded special session was to finally finish work on the state budget and other necessary government reforms, the House Democrats also found time to lay the groundwork to in effect sue the voters over their passage of I-1053. Last November 64% of voters adopted I-1053 and for the fourth time (1993, 1998, 2007 and 2010) ratified a requirement that tax increases require a 2/3 vote. Many legislative opponents of the 2/3 vote requirement believe the restriction to be an unconstitutional obstacle to their ability to raise taxes with a simple majority vote. This is why late Tuesday night (the second to last day of the special session) and before taking action on small things like the capital budget, statutory debt limit and state government consolidation (SB 5931), the House spent 40 minutes to debate a tax increase bill (HB 2078) . . . READ MORE

Compromise on Workers' Comp; Accomplishes Half the Savings of Voluntary Settlement Agreements

Late Sunday evening the Governor, flanked by the four caucus heads, unveiled the outline of a new compromise on workers' compensation. I say outline because no actual bill has been released as of Monday morning (this is somewhat problematic in its own way, since a rushed process has resulted in drafting errors in past sessions), although the state has a placeholder for the bill on its site . . . READ MORE

State passes bill to toll I-405, and protects the revenue for highway purposes

The Governor recently signed HB 1382 into law. The bill would toll two lanes on I-405 in the north end, between I-5 and Bellevue. The original bill was amended and contains some significant changes. The most notable is keeping the toll revenue in the Motor Vehicle Fund, which triggers the protection of the 18th Amendment. This is good news for drivers because the tolls collected on I-405 can only be used for highway purposes and not raided by lawmakers . . . READ MORE

Senate rejects extension of "temporary" stadium taxes

The Senate was on the verge today of re-writing the Legislative definition of a "temporary tax." The current definition of a "temporary tax" is a tax that expires as promised at the scheduled time. Had the Senate adopted SB 5958 (extending the "temporary" stadium taxes enacted in 1995) as originally proposed this would have become the new definition of "temporary tax:" "A temporary tax is a tax that is promised to expire to pacify voters in order to move special interest legislation but will ultimately be extended to pacify vocal special interests at the expense of legislative integrity to the voters . . . READ MORE

Senate moves forward with small competitive contracting reform

By a vote of 29-18 the Senate today adopted a proposal to consolidate several administrative agencies and create a review process to help identify opportunities for some competitive contracting. Sponsored by Senators Baumgartner and Zarelli, SB 5931 creates a new Department of Enterprise Services and Department of Consolidated Technology Services by consolidating several administrative agencies and activities. According to the bill report, SB 5931 also requires . . . READ MORE

Voters' thoughts on tax exemptions circa 1972

While researching a totally unrelated topic I came across a very interesting vote from 1972 that directly impacts the current tax debate occurring in Olympia. On the same ballot where voters authorized the state's landmark public records law (I-276) they also rejected by a vote of 45%-55% a proposed constitutional amendment that would automatically sunset all tax exemptions unless reauthorized . . . READ MORE

Government shutdown looms

The battle lines are becoming so entrenched in Olympia that the prospect of a government shutdown are starting to be discussed. Here is how the AP describes the situation: "Top officials in Washington state started preparing Monday for a potential government shutdown in July as lawmakers stalled in their bid to reach a budget compromise. Gov. Chris Gregoire said she has started holding talks with Cabinet and financial-management leaders about what would happen if there were no spending plan by the time a new budget cycle begins in July. She's seen little progress in budget negotiations in the Legislature and can't recall a time that things have been so bogged down. 'I'm a little discouraged,' Gregoire said. She's asked lawmakers for an agreement-in-principle by the end of this week . . . READ MORE

No budget by June 1 --- lawmakers guilty of misdemeanor?

As we come closer to the end of the 1st Special Session (May 25) and the prospects of a 2nd Special Session growing, what is the drop dead deadline for the 2011-13 budget to be adopted? According to the state's Budget and Accounting Act (RCW 43.88) that would be around June 1 . . . READ MORE

Stage set for tax fight in House

The House Ways and Means committee took the first steps this afternoon to setting up a tax fight on the floor of the House during the "budget focused" special session. In a 15-11 vote, the committee members approved an amended version of HB 2078. The proposal would raise taxes on bank mortgage activity. Because the proposal is not a referendum it would require a 2/3 vote on the floor of the House making its prospects highly unlikely. Instead it appears the potential floor fight is more geared toward scoring political points since the outcome is all but certain to end in defeat of the proposed tax increase . . . READ MORE

Battle of the initiatives

Yesterday the House passed two bills suspending Initiative 728 and Initiative 732. These two "free" education measures adopted by the voters in 2000 have been repeatedly suspended in tight fiscal times leading some to say the Legislature pays selective attention to the will of the people. Supporters of I-728 and I-732 complain that rather than suspend these voter approved laws, lawmakers should instead suspend/repeal/alter I-1053 that requires a 2/3 vote of lawmakers to raise taxes . . . READ MORE

Is it a tax or a fee?

Whether a government charge is a tax or a fee is of great importance under the state's requirement that tax increases receive a 2/3 vote for approval. Often the line between the two can be blurred, however, which is why it is good to have a bright line test to help clearly define if a proposed revenue increase is a tax or a fee. A recent ruling by the U.S. Government Accountability Office (GAO) provides a good cheat sheet to use. In a ruling yesterday declaring California's E-Waste Recycling Fee is in fact a tax and not a fee, GAO found . . . READ MORE

Tax increases on special session hearing agenda

Proposed tax increases will take center stage Wednesday in the Senate Ways and Means Committee despite the promise from legislative leadership and the Governor that the special session would be focused on only those bills necessary for finishing the budget . . . READ MORE