Voters could be asked this fall to raise the state sales tax by 0.3 percentage points for three years to “buy back” some of the cuts the Legislature is planning for health care programs.
Rep. Eric Pettigrew, D-Seattle, chairman of the House Health and Human Services Appropriations Committee, said he’s sponsoring House Bill 2377 because he saw first-hand what damage would be done to health programs for the poor and the elderly if the Legislature adopts the budget now before it.
“I’d rather see us buy those cuts back,” he said Wednesday, shortly after he introduced the bill.
The temporary tax, which would not expire until Dec. 31, 2012, also would pay for the Working Families Tax Rebate. That program, which was approved but not funded last year, would give low- and moderate-income families a tax rebate for some of the money they pay in state sales taxes.
The proposal would be put to voters on the November general election ballot.
HB 2377 would raise the state’s share of the retail sales tax to 6.8 percent from 6.5 percent. That would push the overall sales tax over 10 percent in some cities.
The tax increase would take effect Jan. 1, 2010. It would raise nearly $1 billion over a three-year period. The bill says 21.6 percent of that amount, or $216 million, would be deposited into the tax rebate account for working families.
Rep. Gary Alexander of Olympia, top Republican on the main House budget committee, said he found it ironic that the Democratic majorities in the Legislature would choose to introduce a tax increase on tax day, an event that was protested by an estimated 4,000 to 5,000 visitors to the Capitol.
“We Republicans continue to believe that we do not need new taxes to balance this budget,” he said. “We can balance it by reprioritization and elimination of some programs that we do not think serve the most vulnerable populations of our state.”
Alexander offered an amendment earlier this week that would have cut $914 million in state spending by eliminating the General Assistance Unemployable program and further cutting back the Basic Health Program.
Pettigrew said those are exactly the people he wants to help with the tax package. As it is, about 45,000 families would be cut from the state-subsidized health program and GAU would be cut by 20 percent to 30 percent. The state budgets also are likely to reduce state payments to hospitals, nursing homes and other health care providers by $1 billion.
Pettigrew’s committee was in charge of identifying about $1 billion of the $4 billion the Legislature is planning to cut to plug a projected $9 billion budget shortfall. The remaining $5 billion would come from federal funds and the transfer of savings and building monies from other state accounts, and by forgoing cost-of-living raises to about 250,000 state and public school workers.
Cassie Sauer, vice president of the Washington State Hospital Association, said the coalition that is promoting the referendum will decide by Tuesday whether it wants to push ahead with a ballot measure campaign.
Members of the coalition are planning to review the final round of public polling this weekend to see whether the public has sufficient appetite to raise taxes to restore health program cuts, she said.
“Each (member of the coalition) will have to decide by Tuesday whether they are in or out,” Sauer said. That’s day 100 of the current legislative session. Lawmakers are scheduled to adjourn five days later, on April 26.
The coalition includes AARP Washington, statewide associations for hospitals, nurses, home care workers, community clinics, nursing homes and the Service Employees International Union locals that represent many of the workers at those facilities.
Senate Majority Leader Lisa Brown, D-Spokane, and Sen. Rodney Tom, D-Medina, vice chairman of the Senate Ways & Means Committee, said many Senate Democrats consider the sales tax regressive, putting too much of a burden on the poor.
For that reason, Senate Democrats would not agree to put a sales tax increase on the ballot unless it were coupled with a tax rebate for working families, they said.
Joseph Turner: 253-597-8436
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