Most state lawmakers stayed away from the Capitol on Tuesday as a House-Senate dispute over taxes remained stuck in a political ditch.
Top House and Senate negotiators were in Olympia to bring ideas for ending the impasse over how to raise $800 million in new revenue – without the temporary sales-tax increase that the Senate has suggested. But no one publicly offered new ideas, and most rank-and-file lawmakers won’t be coming to Olympia today, either.
“Right now, I’m not the most optimistic person in the room, to say the least,” Gov. Chris Gregoire said Tuesday after signing a flurry of bills into law. “We’re clearly struggling.”
The impasse formed a few weeks ago, during the 60-day regular session. Today is the 10th day of special session that, by law, could run 30 days. The House and Senate moved nearer to agreement over the weekend on an operating budget and capital budget, but the revenue piece is slippery.
The House Democrats say they lack votes for a sales-tax increase – even the Senate’s scaled-back plan – as part of their nearly $800 million tax package. And the Senate can’t find the minimum 25 votes of support for substitute taxes the House approved.
The hard-to-approve ideas include adding tax to custom software sales, adding tax on banks’ interest earnings on first mortgages in excess of $120 million, and ending a sales-tax break on out-of-state residents’ purchases in border counties.
The Department of Revenue estimates that delaying action on a tax plan could cost the state about $13 million to $15 million in revenue collections, if the starting date for several taxes moves from April 1 to May 1. Gregoire met with House Speaker Frank Chopp and was scheduled also to meet late Tuesday with Senate Majority Leader Lisa Brown. In a bid to break through Sunday, Gregoire suggested a lower revenue target of $700 million, using smaller reserves to make up the other $100 million, but Brown says that leaves too little in reserves.
The Democratic governor said she added a caveat: If that lower tax level was not acceptable, she wanted Chopp and Brown to come back with new ideas for reaching $800 million without a sales tax.
Brad Shannon: 360-753-1688
bshannon@theolympian.com
www.theolympian.com/politicsblog
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