Senate: Green Light For Simple-Majority Tax Hikes

By DAVID AMMONSAP Political Writer OLYMPIA (AP) – The Democratic Senate joined House colleagues Saturday in sending Gov. Christine Gregoire a bill that overhauls voter-approved spending limits and allows taxes to be increased by a simple majority vote. Without a vote to spare, the Senate approved a new version of Initiative 601 that squeaked through the House the night before. The Senate vote was 25-16; the House tally was 50-43. A total of 25 votes in the Senate and 50 votes in the House were needed to pass the measure. The governor, who supports a modest tax increase and revision in the spending limit law, is expected to sign the measure on Monday, said Senate budget Chairwoman Margarita Prentice, D-Renton. That will be just in the nick of time for the Democratic Legislature to begin passing a two-year, $26 billion state budget and the $500 million package of “sin taxes” and revenue-related bills to balance it. Negotiators were working on the budget Saturday. Both Prentice and House Appropriations Chairwoman Helen Sommers, D-Seattle, said the talks are going well and that a compromise deal should be ready by the middle of the new week. Education, higher education and human services are the main areas of dispute. The 105-day regular session must adjourn by next Sunday night. The new legislation overhauls the initiative that voters approved in 1993. For the next two years, it allows simple-majority approval of new revenue, rather than the two-thirds approval that I-601 mandates. Democrats passed a similar suspension in 2002 but it would expire this year if not renewed. Both chambers propose “sin taxes,” including a 60-cent-a-pack increase in the cigarette tax and higher liquor taxes, as well as reimposition of a tax on estates of the wealthy. New taxes would bring in roughly $400 million, with additional revenue driving the total to about $500 million. The measure also changes the I-601 spending cap to say the state’s budget can grow as fast as the 10-year average of growth in average personal income in the state, roughly 5 percent a year. That’s more generous than the original growth factor of population growth plus inflation, about 3.5 percent a year. Sen. Joseph Zarelli, R-Ridgefield, his party’s lead budget negotiator, said, “It’s a sad, sad day for Washington state taxpayers. “I fear we’re heading back to the days of double-digit state budget increases and consistent tax increases. We shouldn’t be making it easier to raise taxes, we should be making it more difficult.” He said voters want lawmakers to live within the state’s means and stop turning to taxes. With the I-601 changes soon to be signed into law, “Those days (of restraint) are over, I guess. Now there is no reason, no motivation, for the government to spend wisely or efficiently.” But Prentice said legislators in both parties had amended the original initiative so many times it had lost its meaning. “It’s time we had a real spending limit,” she said in an interview. “We feel the new limit will be more realistic and we’ll use the suggestion from the economists that our budget grow no faster than the economy grows, no faster than personal income grows.” The two-thirds requirement for taxes will be restored in two years, and shouldn’t be a problem, she said. “We believe we’ll be in better shape financially in two years and we’ll be able to live within our means,” Prentice said.