A couple of tentative nibbles at Washington's 640 tax exemptions took place Friday in Olympia. But it will take several months before anyone knows whether those nibbles will translate into any serious chomping.
First, the anti-exemption group Tax Sanity filed paperwork Friday with the Washington Secretary of State to start an initiative campaign to require the state Legislature to list every tax exemption in every budget passed by the House and Senate. The idea is that each of the state-controlled tax exemptions should be considered as a budget expense — and should be considered as such in each biennial budget, said Tax Sanity leader Steve Zemke.
Out of the state's roughly 640 tax exemptions, the Legislature controls 452. The others are required by the state Constitution or the federal government.
Second on Friday, a state-level tax advisory commission put 10 aerospace-related exemptions and six food processing industry exemptions at the top of tax breaks that might be studied in depth.
The Citizens Commission for Performance Measurement on Tax Preferences is scheduled to recommend in October 2014 which of 70 exemptions should be considered for closing. Those recommendations will go to the Joint Legislative Audit & Review Committee — eight GOP and eight Democratic legislators split between the Senate and House. The JLARC will forward its own recommendations for tax exemptions that should be eliminated or kept to the House and Senate.
The citizens commission tends to be a bit more gung-ho about closing tax exemptions than the JLARC. Since 2007, the JLARC has recommended terminating seven tax exemptions, allowing 12 more to expire and continuing 99. And it has sought clarification from the Legislature about the goals for 40. The Legislature has eliminated only a handful of exemptions. This year, the House Democrats want to eliminate 11 tax exemptions, while the Senate Majority Coalition Caucus is equally adamant about keeping all 11.
The Tax Sanity petition for a referendum is to be sent directly to the 2014 Legislature to ask it to put the matter to a public ballot. That gives the petitioners all of 2013 to collect the needed 246,372 signatures.
Zemke described Friday's petition as a draft to stimulate public discussions, with the organizers expecting to submit a tweaked initiative proposal later this year.
Zemke contended that each of the 452 state-controlled tax exemptions should be listed as an expense in each biennial budget. The current state operating budget proposals in the neighborhood of $33 billion to $34 billion would be considered to be in the hundreds of billions of dollars if exemptions are counted as expenses. Tax Sanity's proposal would translate into a budget vote also being a vote on all tax exemptions.
"It will be more complicated" Zemke conceded. He added, "We're arguing that this is reality." He noted that numerous tax exemptions date back decades, with fuzzy origins. And he contended that a biennial vote on the 452 would give legislators less political cover to allow those exemptions to continue.
This is not the only complicated tax-related initiative that will be trying to collect sufficient signature this year. On the opposite end of the political tax spectrum, professional initiative promoter Tim Eyman is trying to collect signatures on a measure that would:
- Require a statewide advisory ballot each year on whether the public supports a constitutional amendment to mandate two-thirds approval of new taxes and tax hikes.
- Limit the time period of all tax increases, tax extensions and repeals of tax exemptions to one year.
- Require that all legislators' votes on tax increases, tax exemptions and tax extensions to be noted on all state voters' pamphlets. The requirement would also apply to the governor's record.
- Eliminate these requirements when the Legislature agrees to send a two-thirds-majority-for-tax-matters constitutional amendment to a public referendum.
Meanwhile, the citizens commission on measuring tax preferences is in the seventh year out of 10 years during which it is supposed review all of Washington's tax exemptions for the first time to see if they should be kept or terminated. Th 2014 list holds 70 potential exemptions to be considered. Friday's meeting was to determine which of the 70 exemptions should be seriously studied and which should not be.
Like what you just read? Support high quality local journalism. Become a member of Crosscut today!