WA Senate leader suggests income tax referendum

Senate Majority Leader Lisa Brown wants voters to weigh in on the idea of an income tax on high earners.

In a blog posting on Thursday, the Spokane Democrat suggested that the Legislature pass the Senate Democrats' temporary three-tenths-of-a-cent increase sales tax increase proposal and that it take effect immediately. But Brown also suggested that the Senate should pass a bill sponsored by Sen. Rosa Franklin, a referendum that would ask voters whether they want to lower the sales tax to 5.5 cents once the temporary sales tax increase expires in 2013, and in its place approve a "high earners" income tax.

The tax would be on 4.5 percent on all income over $200,000 for individuals, $300,000 for heads of households, and $400,000 for married couples.

"It's a question to voters if that's the direction they would want to go," Brown said later in the Senate wings.

The likelihood of such a measure getting enough votes, even among Senate Democrats, is uncertain, and even Brown acknowledged she hadn't yet counted votes.

"Just because we're holding a hearing doesn't mean that this is a direction for the caucus," said Senate Ways and Means Vice Chairman Rodney Tom, D-Medina, who is opposed to the measure. "We have a lot of serious issues we need to address now, as far as how we're going to get our fiscal house in order and get a balance between our revenues and our expenses."

Lawmakers are working to patch a $2.8 billion budget deficit before the legislative session ends next Thursday.

House and Senate Democrats have both unveiled proposals that have a mix of cuts and tax increases.

The Senate is pushing for a temporary sales tax increase and an additional $1-per-pack tax on cigarettes, and closing numerous tax exemptions. House Democrats are looking to shrink a long list of tax exemptions and collecting more money from smokers, lawyers, accountants and out-of-state businesses.

House Democrats indicated that introducing such a measure a week before session is set to adjourn makes it a long shot.

"It seems fairly unlikely," said House Majority Leader Lynn Kessler, D-Hoquiam. "But, you know, everybody's out there trying to figure out a way that will work."

Republicans questioned whether such a referendum could be passed on a simple majority vote. Sen. Joe Zarelli, R-Ridgefield, said that he thinks any change to the tax code would require a constitutional amendment, meaning that two-thirds of the Legislature would have to approve it.

"They're trying to do the class-warfare thing in their tax debate," he said. "But constitutionally, it's not going to work."

Brown has long supported the idea of an income tax on the state's highest earners, but the idea has not been able to gain traction in past years.

She pointed to the January election in Oregon, where voters approved tax hikes on businesses and the wealthy. Measure 66 raised tax rates on individuals who earn more than $125,000 and couples with incomes greater than $250,000. Measure 67 increased business taxes.

"Oregon voters spoke loudly and clearly about their desire to limit the impact of any revenue increase on middle class families, while also protecting the classrooms, financial aid, health care and public safety so essential to their middle class standard of living," Brown wrote on her blog.

Brown said that under the referendum, the state's middle class voters could "not only have a the opportunity to protect essential services while asking wealthier citizens to pay their fair share, but the middle class would also have the opportunity to lessen the amount they currently pay."

Gov. Chris Greogire is "not closed off to the idea, but knows there's difficulties," said spokeswoman Karina Shagren.

"Given the timing of the legislative session, it makes it even more difficult," she said.

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AP writer Curt Woodward contributed to this report.

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The measure is Senate Bill 6250.

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On the Net:

Sen. Lisa Brown's blog post, http://bit.ly/aLrCo7

Washington state Legislature, http://www.leg.wa.gov