As we've reported several times now, the state House was thinking about ending a tax exemption on interest earned by big banks on first mortgage loans, but the idea was killed by the Senate . An exemption on interest over $100 million—worth about $50 million to the state annually—has been on the books for years (tailored to help Washington Mutual.)

The Legislature did make one fix to the bank loophole, though. Banks were getting away—at the rate of about $4 million a year—with labeling mortgage fees as interest. This year's budget fixes that.

Now, mortgage fees can't hide under the "interest" tax shelter—unless anti-tax crusader, Tim Eyman, gets his way.

Eyman filed eight separate ballot measures today to repeal the soda, beer, bottled water, tobacco, and B&O tax increases—and the bank fix—that the state passed as part of its $800 million revenue package.

Eyman's proposed initiative reads: "In computing tax there may be deducted from the measure of tax by those engaged in banking, loan, security or other financial businesses, amounts derived from interest received on investments or loans primarily secured by first mortgages..."

House Finance Chair Rep. Ross Hunter (D-48, Medina) tells PubliCola:

"The bank tried to avoid paying B&O on the fee revenue they collect from mortgages by calling it interest. We clarify the difference. [But] Tim thinks banks shouldn't pay taxes."



Eyman has not yet returned my call.

Other possible battles at the ballot box—a high earners' income tax being considered by a tax reform group that includes Bill Gates Sr., and a move by the grocery and drug store industry to privatize liquor sales.

To get an initiative on the ballot, supporters will need to turn in about 300,000 signatures by July 2.