No shortage of ideas on tax proposals

State lawmakers struggling to reach consensus on tax increases to help balance the state budget are getting conflicting messages from interest groups.

The Washington Education Association opposes a proposal by Senate Democrats to increase the state sales tax by three-tenths of a cent to help pay for certain education programs such as all-day kindergarten. It wants lawmakers to raise money by closing tax exemptions.

On the other side, Democratic leaders in the House and Senate say business groups are pressing them to drop efforts to end tax exemptions, such as eliminating a tax deduction for used-car trade-ins. And that if they must increase a tax, make it the sales tax.

"If it's the wisdom of the Legislature to raise taxes, we believe it should be broad based and shouldn't single out any one industry," said Denny Eliason, a lobbyist for the Washington Bankers Association, noting many of the other proposals would hurt banks.

But the Washington Roundtable, an association of corporate executives, is saying no to any tax increase. "Our view is, it's sort of like asking: 'Do you want death by lethal injection or death by hanging,' " Roundtable President Steve Mullin, said of sales taxes versus exemptions. "We'd prefer to stay alive."

Rebuilding Our Economic Future, a coalition of labor, education, health-care and other groups, says it will support any tax increase, although it prefers ending exemptions as a way to raise money because the sales tax is considered regressive and hits the poor harder.

Democrats control both the House and the Senate in Olympia.

At the moment, Senate Democrats say they have the votes to pass a $918 million tax package, but the House has yet to even release its tax proposal.

House Democrats say there's still a deep divide over whether to include a sales-tax increase.

Several moderate Democratic members, including House Majority Leader Lynn Kessler, D-Hoquiam, support a temporary sales tax. But House Speaker Frank Chopp, D-Seattle, does not. Chopp often wins these kinds of fights, but the sales-tax proponents say they haven't given up.

The latest word is House Democrats will release their tax package on Friday, but who knows if that will really happen.

— Staff reporter

Andrew Garber

To reach a Seattle Times political editor, call 206-464-2204.