OLYMPIA -- Republicans in Olympia say they're again being left out of the budget-writing process, particularly as Democrats prepare to overturn a voter-approved requirement that tax increases require a two-thirds vote of the Legislature.
Senate Democrats introduced a plan Wednesday to temporarily suspend Initiative 960 and to rewrite other parts in a way Senate Majority Leader Lisa Brown said brings the initiative in line with legislative processes.
Senate Bill 6843, sponsored by Sen. Margarita Prentice, D-Renton, would suspend until July 2011 the provision requiring a two-thirds legislative majority.
It also redefines what it means to "increase taxes" to exclude closing tax loopholes, addressing court decisions that reduce revenue and transferring revenue between state accounts.
Closing tax loopholes and transferring money are among possible solutions Democrats have discussed to plug a $2.6 billion hole in the supplemental budget for the remainder of the 2009-11 biennium.
A bill proposed in the House on Wednesday -- House Bill 3176 -- aims to bring in $268 million by "fixing and updating" the tax code, but the initiative must be suspended before the bill can be enacted.
"People who voted for I-960 voted in principle for transparency, fiscal restraint and accountability," said Rep. Ross Hunter, D-Medina, architect of the tax code bill. "But I-960 in practice is an impenetrable roadblock to thoughtful, reasoned governing. Not only does it keep us from making sensible fixes to our tax code, the two-thirds majority requirement leads to the worst kind of politicking and vote-trading, as witnessed in national efforts to pass health care reform, or in efforts to pass a budget in California where a two-thirds majority is required."
Senate Bill 6843 amends another provision of the initiative requiring public notice whenever a tax bill is introduced to instead require notice only if the bill gets a public hearing in a legislative committee.
Brown said only about 25 percent of bills ever get hearings, and the amendment would allow more effective use of state resources.
Another amendment would change the requirement for a 10-year cost projection of tax bills to a six-year outlook. Brown said that's in line with how the Office of Financial Management prepares fiscal notes for other kinds of bills.
The bill eliminates the requirement in I-960 for a public advisory vote following a tax increase by the Legislature.
Tim Eyman, who put I-960 on the ballot in 2007, described the move by Democrats as "galling" and "arrogant." He has already filed an initiative putting the two-thirds requirement back in place.
Brown dismissed Eyman on Wednesday by pointing out his last initiative to cap growth of government general fund revenues was a flop with voters in November.
"We are in a very difficult budget situation, and to have to get a two-thirds vote to even transfer money from one account to another or to close a tax loophole puts an unfair limitation on the process," Brown said.
Republicans said the move to suspend I-960 is coming at the wrong time.
"I am incredulous that Democrats are setting the stage for raising taxes in this economy," said Senate Minority Leader Mike Hewitt, R-Walla Walla. "People are terrified right now. Everybody knows someone who's lost a job. Working people and employers are just trying to survive in this economy. They should not be asked to bail out poor state spending decisions through higher taxes."
Hewitt said there are some tax fixes Republicans might support -- meaning setting aside I-960 wouldn't be necessary -- if Democrats would consider those measures.
One proposal Hewitt said his caucus might support is eliminating a tax break for out-of-state companies with no employees in Washington. "I think they'd easily get two-thirds on that if they keep it narrowed," he said.
But talks between the Democratic and Republican leaders on the budget have broken down, Hewitt said.
Brown said there are examples of Democrats working with Republicans on issues in the Legislature, and cited the capital budget, which usually includes projects in Republican districts.
"I think we do have an obligation to work together on issues," Brown said. "Even though I don't anticipate many Republican votes on the budget doesn't mean we won't be working with them on the budget."
-- Michelle Dupler: 360-753-0862; email@example.com