New state tax plan in works

Interest groups pushing for a tax referendum of as much as $2 billion are planning a second round of polling to help narrow down options for state lawmakers, people involved in the effort said this week.

The coalition, which has been quietly developing plans for a possible tax vote for several weeks, also is stepping into public view for the first time – an effort to fight impressions that it was hatching secret plans to raise taxes.

The group includes the Washington State Hospital Association, the Washington Education Association, several branches of the Service Employees International Union, Group Health and the Washington Conservation Voters, hospitals spokeswoman Cassie Sauer told The Associated Press.

Coalition members are hoping to persuade lawmakers to send a tax referendum to voters, with a price tag of about $1.5 billion to $2 billion, to soften the blow of deep budget cuts being contemplated by legislators.

The group’s members have different ideological viewpoints, and some don’t often work together on political matters. But with deep budget cuts on the horizon as lawmakers try to solve a deficit of $8 billion or more through fiscal 2011, “we’re the ones whose necks are on the chopping block,” Sauer said.

Hospitals, for instance, are scrambling to avoid huge cuts to public health care programs, which help hospitals cover the cost of treating poor people who don’t have private insurance.

Preliminary polling and focus groups have shown that voters might be open to “sin” tax increases, including on cigarettes, liquor and junk food, and perhaps even some sales tax increases, Sauer said.

Business taxes are less popular in polling so far, Sauer said. The group also is not contemplating any property tax hikes to help save state programs, she said.

Voters also seem more likely to favor tax hikes after learning exactly how deep budget cuts could be, but the public doesn’t appear to be in tune with just how many programs might be in jeopardy, Sauer said.

“We have a lot of education to do with the public about what the cuts could be,” Sauer said.

The Associated Press, citing a person briefed on the polling results, also has reported that the public might prefer a temporary tax increase over a permanent levy. The information was provided to the AP on condition of anonymity because the person was not authorized to discuss the matter publicly.

The only realistic option for raising any extra revenue is a referendum, a proposed tax hike that lawmakers could place on the statewide ballot. The groups in the coalition are planning to pay for any eventual referendum campaign, Sauer said.

Any vote could come in November, or at one of the previously set special election dates, Sauer said.

Meanwhile, House budget writers have begun penciling out how far they’d have to reduce health care programs in an all-cuts budget that assumes a shortfall of about $8.5 billion.

That level of cuts would require about $2 billion from health and human services programs, said Rep. Eric Pettigrew, D-Seattle, chairman of the Health and Human Services Appropriations Committee.

To achieve cuts that steep, the committee has drawn up a preliminary proposal that would cut much deeper than Gov. Chris Gregoire’s budget contemplated.

That budget-cutting exercise – a “what-if” drill that doesn’t yet account for more than $1 billion in federal aid – would completely eliminate the Basic Health Program, call for 10 percent deeper cuts in nursing home rates, and cut hospital Medicaid rates by about 14 percent.

checking in midsession

Coming Sunday: How will Washington fill its growing budget gap? Plus, our midterm rundown of key legislation.

Legislative Forum: News Tribune columnist Peter Callaghan moderates a panel discussion with senior South Sound lawmakers March 19, beginning at 6:30 p.m. at The News Tribune, 1950 S. State St., Tacoma.