The measure would allow families who qualify for the federal Earned Income Tax Credit – a tax rebate program – to apply for a state refund as well. Under the Democrats’ plan, the state would match 5 percent or 10 percent of the money returned under the federal rebate.

For example, if a family is refunded $1,500 from the federal government, the state would send the family $150 under the 10 percent cap. The $60 million per year estimated cost of the state program assumes the 10 percent rebate and is based on the $600 million in refunds received by Washington residents in 2004 under the federal program.

The measure passed on a 32-16 vote, and now heads to the House.

The Earned Income Tax Credit program was created in 1975 to offset the tax burden, according to the Internal Revenue Service Web site. Families with limited income can apply for the rebate. According to Senate Democrats, the federal tax credit helped 4.4 million people rise above the poverty line in 2002.

But the gloomy state budget forecast forced Democrats to attach an amendment to the bill that allows the state to suspend the tax credit in dire financial times. The bill creates the infrastructure to operate the program, but it won’t be until the next biennium that the Legislature decides if it wants to implement the 5 percent or 10 percent return, said Sen. Craig Pridemore, D-Vancouver, the bill’s sponsor.

Opponents said it would be a waste of money to set up the program’s infrastructure, at around $2 million in administrative costs, if the program is later suspended.

From the start of the session, Senate Republicans have pushed for a property tax overhaul as their method to help taxpayers, but Democrats did not allow any of the GOP bills to make it to the Senate floor. Republicans tried to force a vote Monday, but failed.

“The greatest call out there, it’s been on the property tax side,” said Sen. Joseph Zarelli, R-Ridgefield. “I think we do a lot for the poor in the budget. … The area we’re not addressing at all is the middle.”

Democrats contended that the tax credit will help stimulate the state economy. Majority Leader Lisa Brown said she wants more people to learn about the federal tax credit, so more federal government money returns to communities, and that the state money would help families pay bills.

“Greater good is at stake here,” said Sen. Phil Rockefeller, D-Bainbridge Island. “After years of passing and voting for tax breaks after tax breaks, and tax credits for corporate interests and for entire industry sectors for reasons we thought were good, and not doing a darn thing for the working poor, I think it’s past time we do something for the hundreds of thousands of working families in this state.”