Will multi-billion dollar tax loopholes in Washington’s budget go to the ballot?

April 26, 2011 | Gary Burris

Gary Burris, Senior Policy Associate

By Gary Burris, EOI Senior Policy Associate

State legislators are floating new proposals to end billions of dollars in tax loopholes now on the books, in an effort to curb $5 billion in projected cuts to education, health care and other services.

With about half of the Senate Democrats in attendance, a group of Senators unveiled a long list of bills to remove business tax breaks. More recently, the state House Ways and Means Committee held a hearing on three bills: HB-2078, HB-2087, and HB-2102.

The first two bills would help restore funding for K-3 class size reductions and mental health services by repealing tax exemptions; the third would restore in-home care for eligible elderly and disabled persons by extending the sales tax to non-state residents and debt collection services.

Operating within the confines of Initiative 1053 (which places an unconstitutional requirement for a 2/3 supermajority on any bill raising new revenue – including those that close tax breaks), the ultimate fate of removing these tax exemptions will lie with the voters if the bills pass the legislature. Why? Because under I-1053, any bill passed by a simple majority of the legislature can be put to the voters as a ballot referendum.

That’s where another bill, sponsored by Senator Ed Murray, offers an intriguing choice. SB 5944 proposes a public vote to determine whether a simple majority requirement is sufficient to remove or adjust tax loopholes now on the books.

With thousands of families losing medical care, seniors and disabled facing devastating cuts to services, and college students seeing unprecedented tuition hikes, Murray’s bill and others that close tax loopholes offer a more balanced approach that can preserve essential state services by ensuring corporations pay their fair share, just like any other taxpayer.

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Posted in Tax and Budget

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