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Inslee on keeping some taxes: A definite maybe

Republicans don't even want him to think about extending taxes that are set to expire. But the governor says he is prepared to consider the step.
Gov. Jay Inslee

Gov. Jay Inslee John Stang

Gov. Jay Inslee will consider keeping beer and hospital beds taxes plus a 0.3 percent business and occupation surcharge from expiring.

On Thursday, Inslee said he would not rule out keeping those temporary taxes intact, but he is also undecided whether they should be kept.

"I don't believe that increases taxes. It extends existing taxes in that regard.. ... That's a numerical certainty that a Husky and a Cougar can agree on a mathematical basis," Inslee said when questioned whether keeping those taxes would violate his no-new-taxes campaign pledge.

On Wednesday, Republicans leaders argued that these taxes should be allowed to expire as scheduled on June 30. "Temporary means temporary," said Republican Senate Caucus Leader Mark Schoesler, R-Ritzville. Republicans say that extending an expiring tax would damage the government's credibility with voters.

Inslee's openness to discussing keeping those taxes is important because he and the Legislature have begun wrestling with a predicted $2.5 billion to $3 billion operations budget shortfall — with Inslee and Republicans promising no new taxes would be installed. These three taxes raise an estimated $650 million to $912 million a year.

Inslee's 2013-2015 budget proposal has not been scheduled yet for its unveiling. The Republican-oriented Senate is expected to reveal its budget proposal in late March after the quarterly revenue forecast is made in mid-March. The Democrat-controlled House will unveil its budget proposal shortly after the Senate budget is annouced.

Meanwhile, Sen. Rosemary McAuliffe, D-Bothell, introduced a bill earlier this week to extend a 0.3 percent beer tax to Dec. 31, 2016. The same bill calls for a tax on fuel of 1.85 percent through June 30, 2015, and of 2.91 percent through June 30, 2017 to help pay for a predicted shortfall of up to $1.4 billion in what the state needs to comply with a Washington Supreme Court ruling to upgrade K-12 education.

The fuel tax would be dedicated to school transportation uses, according to McAuliffe's bill. Legislators are toying with the idea of shifting $250 million to $300 million in education transportation costs to the state's transportation fund, which receives part of its revenue from fuel taxes.

McAuliffe's bill has been sent to the Republican-dominated Senate Ways and Means Committee.

John Stang covers state government for Crosscut. He can be reached by writing editor@crosscut.com.


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