Wash. Senate passes $804 million tax package

After two days of contentious debate, the state Senate on Sunday approved an $804 million tax package that is centered on a three-tenths-of-a-cent sales tax increase.

The measure passed on a 25-23 vote, with six Democrats crossing the aisle to vote against it. Once the House passes its proposed revenue plan, both chambers will go into final budget negotiations.

"This is one of the toughest votes I have taken in my political career," said Sen. Tracey Eide, D-Federal Way. "Do I want to raise taxes? I say no, hell no, I don't want to raise taxes. Who does? But I have a constitutional duty to balance this budget."

The sales tax increase approved by the Senate, to expire in 2013, is worth about $313 million, and includes a rebate for lower-income people.

The measure also increases taxes on several kinds of service businesses for three years, raising about $170 million. Another $30 million would come from charging sales tax on bottled water. It also repeals a sales-tax break to some companies based outside Washington, following the state's loss in a recent court case with Dot Foods that cost the state about $118 million.

More than a dozen Republican amendments were introduced and debated for more than four hours on Saturday, including one that would require voters to approve the taxes. All were rejected except one, which would take away lawmakers' expense allowances if the sales tax is extended beyond June 30, 2013.

Debate on final passage of the bill lasted more than an hour Sunday, but before a final vote could be taken, Sen. Don Benton, R-Vancouver, made a motion that lawmakers vote on each of the 21 tax provisions in the bill. Lt. Gov. Brad Owen, who is also the Senate President, ruled against that request. Republicans further sought to delay the vote on the tax bill by seeking to have the measure indefinitely tabled, but that request was denied as well.

Republicans argued that Democrats have continued to increase spending, and tried hard enough to make government more efficient before seeking more revenue.

"Just like the people at home, we should tighten our belts," said Sen. Cheryl Pflug, R-Maple Valley.

Sen. Rodney Tom, D-Medina, said he was voting against the measure because it was too big.

"The inclusion of a sales tax is very harmful on an economy that is struggling to recover," he said. "I don't think we've fully recognized where our economy is at."

Other Democrats who voted against the measure were Sens. Steve Hobbs of Lake Stevens, Claudia Kauffman of Kent, Derek Kilmer of Gig Harbor, Chris Marr of Spokane and Tim Sheldon of Potlach.

Sen. Phil Rockefeller, D-Bainbridge Island, said that the tax increases were needed to protect programs important to the state.

"Who's going to step up to protect education in this state, who's going to speak for public health services, who's going to speak for the disabled and the vulnerable?" he asked. "These are values for all of us, and I think this budget reflects our values."

The Senate is also likely to vote Sunday on an extra $1-per-pack cigarette tax.

Lawmakers are racing to patch a $2.8 billion budget deficit before the legislative session ends on Thursday. House and Senate Democrats have passed budget proposals that have a mix of cuts and tax increases, but the Senate is the first to approve a revenue proposal. House Democrats have not proposed a sales tax increase, and instead are looking to shrink a long list of tax exemptions and collecting more money from smokers, lawyers, accountants and out-of-state businesses.

With only days left in the 60-day legislative session, the House and Senate will now have to work out differences in their budget blueprints and settle on a tax package to help pay for it all.

If lawmakers are unable to finish their work on time, Democratic Gov. Chris Gregoire could be asked to call the Legislature into a special session. The entire House and half the Senate are up for re-election this fall.

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The tax measure is Senate Bill 6143.

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On the Net:

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