SEATTLE - It's like juggling three flaming torches - Washington legislators can make further cuts to state services and programs, enact tax increases or close tax loopholes. This week at a special session, the lawmakers will try to agree on a combination of actions to balance the state budget without burning anyone.

The group Fuse Washington is making a last-minute pitch for one action in particular: HB 3176, a bill that would end a tax exemption for the largest banks that allows them not to pay taxes on interest earned from first mortgages.

Jim Dawson, the group's organizing director, says the exemption was made 40 years ago to help Washington-based national banks compete for mortgage business with out-of-state rivals, but the banking market has changed.

"Now, we don't have any big, in-state national banks, after WaMu was bought out by Chase. So the exemption is really no longer valid. Also, there's a lot of evidence the banks never really passed along their savings to consumers."

Today, members of Fuse Washington are protesting in front of a Chase bank branch in downtown Seattle to make their point. With all the state budget cuts to education, health and social services, they don't think a tax giveaway to out-of-state banks makes sense, Dawson says.

"We feel the banks have gotten plenty of support from taxpayers in the bailout - money that they've pocketed and given away to their executives in bonuses. They don't need any more tax dollars. We need this money to be invested in our kids, in our future and in our quality of life."

Dawson says ending the exemption would not affect smaller banks, and would increase state revenue by $67 million through the end of this budget cycle, June 2011.

The protest takes place today at 11 a.m. at 2nd and Union streets, Seattle.