When the 2013 Legislative Session began this past January, tax increases in our state were a long shot.
First there was the voters’ most recent confirmation, for the fifth time, of our state’s two-decade-old law requiring a supermajority vote in the legislature to raise taxes. That proposal, Initiative 1185, received 64 percent of the vote (more than President Obama received) and passed in every county of the state, including King County.
Then there was the campaign promise of newly sworn-in Governor Jay Inslee (D), who promised, “I would veto anything that heads the wrong direction and the wrong direction is new taxes in the state of Washington.”
Finally there was the newly formed Senate Majority Coalition — 23 Republicans and two Democrats — that said it would not support a tax increase to balance the budget. Speaking on behalf of the coalition, Senate Republican Leader Mark Schoesler (R-Ritzville) said, “Our first priority has been to help the governor keep [his] pledge.”
Fast forward to budget-writing time and two of those three taxpayer safeguards are no more.
In a 6–3 ruling on February 28, the state Supreme Court declared Washington’s 20-year-old law requiring a supermajority vote to raise taxes unconstitutional.
According to the majority opinion: “Our holding is not a judgment on the wisdom of requiring a supermajority for passage of tax legislation. Such judgment is left to the legislative branch of our government. Should the people and the legislature still wish to require a supermajority vote, they should do so through a constitutional amendment.”
Although a proposed constitutional amendment to remedy the court ruling cleared a Senate committee, it was not brought up for a floor vote.
Then, on March 28, Governor Inslee released the first budget proposal of his administration, and his plan to increase taxes by more than $1 billion. Despite his campaign promise that he would veto tax increases, and his plan for new revenue would come from job creation and a growing economy, Governor Inslee said that his proposed $1 billion in tax increases are not “tax increases.”
In fact, when asked if he was breaking trust with voters by proposing tax increases Inslee said, “I am doing today exactly — exactly — what I said I was going to do if I was given this great responsibility of being governor.”
Governor Inslee said on the campaign trail he was open to closing tax preferences (though he didn’t specify which ones or for how much); more than half of his $1 billion tax increase proposal depends on what the definition of a tax increase is. According to Inslee, extending “temporary” taxes that are scheduled to expire is not a tax increase.
Approximately $662 million of the governor’s tax proposal comes from extending three-year taxes imposed in 2010 on some businesses based on the promise that the higher levies would end on July 1 this year.
The governor’s strained definition of a tax increase is wrong. Under state law [RCW 43.135.034 (b)] the definition of a tax increase is “any action or combination of actions by the state legislature that increases state tax revenue deposited in any fund, budget, or account.”
This means that under the law, as well as common understanding, extending a temporary tax scheduled to expire is in fact a tax increase.
The attempt by Governor Inslee to redefine what a tax increase is brings to mind the famous cartoon episode of “The Simpsons” in which President Lisa Simpson decides to describe her proposed tax increase as a “temporary refund adjustment” instead of a “colossal salary grab.”
The Senate Majority Coalition is standing firm in its objection to tax increases and plans to rely on the $2 billion in revenue growth forecast for the next budget.
It is disappointing to see Governor Inslee break his strong campaign promise not to pursue tax increases. We agree with the statement made by then-candidate Inslee’s campaign that “taxes are not the way forward.” Instead of trying to raise taxes, budget writers should take advantage of the $2 billion in additional revenue taxpayers of our state are already providing.