Sales tax-increase talk turns into action as bill's introduced

OLYMPIA — The wait for a state tax-increase proposal is over.

State Rep. Eric Pettigrew, D-Seattle, introduced a bill Wednesday that would ask voters to temporarily increase the state sales tax by three-tenths of a penny to help backfill cuts to health care in the state budget.

House leadership backs the bill, said House Majority Leader Lynn Kessler, D-Hoquiam. But Pettigrew said he's not sure yet if there are enough votes to get it out of the House.

"As the idea gets out there, we'll start working it and see what happens," he said "We're just getting the ball rolling."

Lawmakers have been talking for weeks about introducing such a measure. Tax revenues have dropped sharply because of the recession. As a result, the state Legislature is expected to cut nearly $4 billion from the next two-year budget.

The proposed tax increase would raise around $900 million over three years, according to House budget writers.

The proposal calls for the tax to remain in place from Jan. 1, 2010 to Dec. 31, 2012.

The money would be used to help pay for the Basic Health Plan, nursing-home care, adult day health programs, public health and other health services, said Pettigrew, who is chairman of the House Health and Human Services Appropriations Committee.

Lawmakers have proposed deep cuts in the Basic Health Plan, which provides subsidized insurance for low-income workers. Other health programs also face budget reductions.

The bill, HB 2377, includes a so-called working-family tax credit to help offset the higher sales taxes paid by the working poor. The bill says 21.6 percent of the tax revenue would go to fund the tax credit.

A hearing could be held early next week, he said.

The Legislature is running out of time to act. The last regular day of the session is April 26.

Democratic leaders in the state Senate said they expect their caucus to discuss the sales-tax proposal and other options late this week. A decision on which tax proposal, if any, the Senate would support is expected over the weekend.

Senate Majority Leader Lisa Brown, D-Spokane, has talked about asking voters to approve an income tax targeted at people earning more than $250,000.

Interest groups that have been exploring the idea of a sales-tax measure said they're doing statewide polling that will help determine the next move.

Cassie Sauer, spokeswoman for the Washington State Hospital Association, said they're happy to hear that Pettigrew is moving forward, but she said it is unclear how much public support there is for a sales-tax increase.

"We are in the midst of polling to see where public support is," she said.

The state sales tax now is 6.5 percent. With local sales taxes added in, it's 9.5 percent for most purchases in King County, and 10 percent in restaurants and bars.

Sauer said that people don't understand what's at stake in budget cuts.

"You will have longer waits in the emergency room, fewer people caring for you in the hospital and the nursing homes," she said. "We would have 60,000 people uninsured in this state overnight."

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

Seattle Times staff reporter

Jennifer Sullivan contributed to this report.