Lobbyists pounding legislators over taxes

OLYMPIA — It would be easier to increase taxes, Democrats say, if the lobbyists would just go away.

"I've never seen them so frantic and so aggressive," said Sen. Ed Murray, D-Seattle, the Senate's lead legislator on taxes.

There's a reason for the frenzy. Lawmakers this session are considering the biggest tax increase in 17 years, not counting the gas tax. Tax packages now range from around $600 million to $900 million to help close a projected $2.7 billion budget shortfall.

It's not clear where lawmakers will end up. Proposals have included a temporary three-tenths of a cent increase in the state sales tax and going after a slew of tax exemptions, such as ending a long-standing tax deduction for used-car trade-ins.

Murray said business lobbyists are focused on protecting tax exemptions and urging lawmakers to increase the state sales tax instead.

"The pounding on the exemption bill continues, which creates a huge question mark no matter where you turn for revenue," he said.

Lobbyists, representing interests from banks to bottlers, are packing hearing rooms and hallways when the budget committees take up tax bills, to the point that it's hard to move around. They're also knocking on a lot of lawmaker's doors.

"We have a responsibility to let legislators know the real impacts of what they're proposing," said Denny Eliason, a lobbyist for the Washington Bankers Association.

He's opposing several proposals, including one that would cap a tax break for first-mortgage lenders.

As for the Democrats' complaint that lobbyists are making it hard for lawmakers to reach agreement on a tax package, Eliason said, "they may be right, but we're doing our job."

The state Public Disclosure Commission says there are nearly 900 registered lobbyists in the state. They're a powerful force.

"They do this full time and are paid an incredible amount of money," Murray said. "We are part time and not paid that well and do other things. Information is power in this business. Their ability to work members and convince members is a distinct advantage."

Legislators said they're not getting pressure from lobbyists opposed to a sales-tax increase.

But there's a flood of opposition to ending tax exemptions. Lobbyists come armed with stories about how each action would threaten jobs and harm the businesses they represent.

On the other side, a coalition of labor, education, health-care and other groups are pushing for tax increases in general to avoid cuts in state services. It doesn't matter a lot which tax, as long as it brings in more money.

Lobbyists or not, it increasingly appears the Legislature is high centered when it comes to increasing taxes.

As one longtime staffer put it: "We haven't done taxes for so long, nobody remembers how to do them."

House Democrats have repeatedly delayed announcing the taxes they support increasing, saying they haven't yet reached a consensus. Their caucus has considered several options and was counting votes Friday to see which ones had the most support.

There's still a divide in the House between lawmakers who support a sales-tax increase and those who prefer closing tax exemptions as a way to raise money.

"I think people are more centered around an approach that is not a sales-tax approach," said Rep. Ross Hunter, D-Medina, chairman of the House Finance Committee.

Hunter opposes a sales-tax increase himself and signed a letter along with 14 other House Democrats saying they would not support a sales tax.

Among Senate Democrats, there appears to be more support for a temporary sales-tax increase, but their tax package is changing and is not expected to be taken up in committee until next week.

Both Houses are expected to vote soon, possibly this weekend, on bills that specify what they plan to cut to help balance the budget.

The House proposes about $653 million in cuts, compared with $838 million proposed by the Senate.

The Legislature is supposed to wrap up business by March 11, but there's growing doubt it will make that deadline.

Andrew Garber: 360-236-8268 or agarber@seattletimes.com