This Washington
Union Members Press Legislators to Look at Billions in Tax Breaks
Showing up in Olympia yesterday with 350 of its members, the Service Employees International Union 925—which represents child care workers, and college and K-12 staffers— fanned out to state senate and house offices to talk to legislators and legislative staffers from nearly every legislative district in the state.
Their message: "Cut tax loopholes, not social services." If it's any harbinger of how the state is going to tackle the $5 billion shortfall in the 2011-2013 budget (the main order of business for the remainder of the session), social services took the brunt of the hit in the final fix for this biennium—nearly $170 million in cuts.
The SEIU folks made the case that if the legislature is going to cut social services to balance the budget, they should also cut tax loopholes—which, as many have pointed out , are also budget expenditures. (Thanks to lots of unknowns, it's impossible to say how much the state would ultimately reap if all 500-plus tax breaks were closed, but estimates of the total amount of money saved by the lucky folks who receive tax breaks is about $6.5 billion per biennium.
People who sat in on the meetings—including meetings with top Republican leaders who ran as fiscal conservatives, such as minority leader Rep. Richard DeBolt (R-20, Chehalis) and Rep. Gary Alexander (R-20, Olympia) and the new Eastside Republican trio, Sens. Steve Litzow (R-41, Mercer Island), Joe Fain (R-47, Auburn), Andy Hill (R-45, Redmond)—report that the GOP legislators said the idea made sense in theory, but that they asked the union folks a question: "Name one you would cut."
The union members, who aren't policy wonks, wanted to keep the discussion philosophical: They were simply trying to get a commitment from leaders that they would take responsibility for combing through the tax preferences in the budget to see which ones didn't make sense.
One specific break, TransAlta's $4 million to $5 million exemption was evidently an elephant in the room during the meeting with Rep. DeBolt, though. (DeBolt works for the Centralia coal plant—a serious greenhouse-gas emissions culprit. The plant is the subject of controversial legislation that originally included a provision to eliminate their tax break. Mainly, the legislation—which is being pushed by Sen. Scott White, D-46, N. Seattle, and Rep. Marko Liias D-21, Edmonds, would phase out coal at the plant.)
Liberal Sen. Maralyn Chase (D-31, Shoreline) and Rep. Eileen Cody (D-34, W. Seattle, Vashon) are sponsoring legislation that would specifically end the TransAlta break as well as a few others—a tax break on corporate planes, a break on cosmetic surgery, and a $50 million tax break on banks' mortgage profits. The bill would net $150 million to help fund the $442 million Basic Health Plan.
Another tax preference bill being drawn up by Sen. Jeanne Kohl-Welles (D-36, Ballard, Queen Anne) and Rep. Reuven Carlyle (D-36) would gradually sunset all 500-plus loopholes and require them to gain legislative approval every biennium. (Currently, getting rid of a tax preference requires a two-thirds vote because repealing a loophole counts as raising taxes under last year's Initiative 1053, which requires a two-thirds vote of the legislature to increase taxes.)
Another elephant in the room, and perhaps one the union activists weren't comfortable bringing up with Republican legislators: The $45 million in tax breaks per biennium for the agriculture industry.
Asked about his meeting with SEIU and putting the lens to tax preferences, freshman Republican Sen. Litzow says "we've got to look at everything and probably a lot of tax preferences don't make sense anymore," but added it wasn't likely that anything requiring a two-thirds vote would be introduced. "No one is talking about raising revenue," Litzow says.
"The big problem [with cutting tax loopholes]," he elaborated, was that they were just a drop in the bucket of the $5 billion shortfall. "There are so many of them," he acknowledged, "and so many details"—meaning, it's hard to know which ones should be cut and how much it all adds up to.
"No one's really talking about [tax loopholes]," he said. "They [SEIU] were the first people to bring it up."
Their message: "Cut tax loopholes, not social services." If it's any harbinger of how the state is going to tackle the $5 billion shortfall in the 2011-2013 budget (the main order of business for the remainder of the session), social services took the brunt of the hit in the final fix for this biennium—nearly $170 million in cuts.
The SEIU folks made the case that if the legislature is going to cut social services to balance the budget, they should also cut tax loopholes—which, as many have pointed out , are also budget expenditures. (Thanks to lots of unknowns, it's impossible to say how much the state would ultimately reap if all 500-plus tax breaks were closed, but estimates of the total amount of money saved by the lucky folks who receive tax breaks is about $6.5 billion per biennium.
People who sat in on the meetings—including meetings with top Republican leaders who ran as fiscal conservatives, such as minority leader Rep. Richard DeBolt (R-20, Chehalis) and Rep. Gary Alexander (R-20, Olympia) and the new Eastside Republican trio, Sens. Steve Litzow (R-41, Mercer Island), Joe Fain (R-47, Auburn), Andy Hill (R-45, Redmond)—report that the GOP legislators said the idea made sense in theory, but that they asked the union folks a question: "Name one you would cut."
The union members, who aren't policy wonks, wanted to keep the discussion philosophical: They were simply trying to get a commitment from leaders that they would take responsibility for combing through the tax preferences in the budget to see which ones didn't make sense.
One specific break, TransAlta's $4 million to $5 million exemption was evidently an elephant in the room during the meeting with Rep. DeBolt, though. (DeBolt works for the Centralia coal plant—a serious greenhouse-gas emissions culprit. The plant is the subject of controversial legislation that originally included a provision to eliminate their tax break. Mainly, the legislation—which is being pushed by Sen. Scott White, D-46, N. Seattle, and Rep. Marko Liias D-21, Edmonds, would phase out coal at the plant.)
Liberal Sen. Maralyn Chase (D-31, Shoreline) and Rep. Eileen Cody (D-34, W. Seattle, Vashon) are sponsoring legislation that would specifically end the TransAlta break as well as a few others—a tax break on corporate planes, a break on cosmetic surgery, and a $50 million tax break on banks' mortgage profits. The bill would net $150 million to help fund the $442 million Basic Health Plan.
Another tax preference bill being drawn up by Sen. Jeanne Kohl-Welles (D-36, Ballard, Queen Anne) and Rep. Reuven Carlyle (D-36) would gradually sunset all 500-plus loopholes and require them to gain legislative approval every biennium. (Currently, getting rid of a tax preference requires a two-thirds vote because repealing a loophole counts as raising taxes under last year's Initiative 1053, which requires a two-thirds vote of the legislature to increase taxes.)
Another elephant in the room, and perhaps one the union activists weren't comfortable bringing up with Republican legislators: The $45 million in tax breaks per biennium for the agriculture industry.
Asked about his meeting with SEIU and putting the lens to tax preferences, freshman Republican Sen. Litzow says "we've got to look at everything and probably a lot of tax preferences don't make sense anymore," but added it wasn't likely that anything requiring a two-thirds vote would be introduced. "No one is talking about raising revenue," Litzow says.
"The big problem [with cutting tax loopholes]," he elaborated, was that they were just a drop in the bucket of the $5 billion shortfall. "There are so many of them," he acknowledged, "and so many details"—meaning, it's hard to know which ones should be cut and how much it all adds up to.
"No one's really talking about [tax loopholes]," he said. "They [SEIU] were the first people to bring it up."
