Morning Fizz

Morning Fizz: "One Percent of the One Percent"

Caffeinated News & Gossip featuring the estate tax, transportation taxes, McGinn's fundraiser, and dissident Democrats.

By Morning Fizz May 31, 2013


1. Along partisan lines, the state house passed Rep. Timm Ormsby's (D-3, Spokane) bill yesterday re-establishing the voter-approved estate tax on people with assets of $2 million or more, which was approved by voters in 2006; the State Supreme Court had subsequently undermined the law in what's known as the Bracken decision by siding with married couples who were getting around the law by transferring their money into tax-free accounts.

In addition to supporting the will of the voters, Ormsby's bill would stave off about $130 million in refund payouts while generating about $160 million in new revenue this biennium, according to the fiscal note.

Referring to the 300 estates in the state that meet the $2 million threshold, Seattle Rep. Jessyn Farrell (D-46, N. Seattle) issued the following statement after the vote:

It’s not even the top one percent of our state that is affected by this – it’s the one percent of the one percent. Educating our children is far more important than allowing this new loophole to continue.

While the anti-tax house Republicans may have failed to keep the loophole alive, Republicans in the senate, who control the upper chamber,  are holding a hearing today on separate legislation that, while getting rid of the marriage exemption, would raise the threshold to $5 million and cut the rate by 25 percent, ending the voter-approved tax for some estates. The bill, sponsored by the senate Republicans' budget point person Sen. Andy Hill (R-45, Kirkland), emphasizes just how far apart the Republicans and Democrats remain on a budget deal with only two weeks left in the special session.

The bill, sponsored by the senate Republicans' budget point person Sen. Andy Hill (R-45, Kirkland), emphasizes just how far apart the Republicans and Democrats remain on a budget deal.

2. Speaking of a budget deal: Not to be disrespectful, but Republican Sen. Mike Carrell's (R-28, Lakewood) death has created the possibility that the Democrats could side with the Democratic house, seize control of the senate, and pass a budget along the lines house budget leader Rep. Ross Hunter's (D-48, Medina) proposal which closes a batch of tax loopholes and imposes a .3 percent B&O tax surcharge for about $500 million in new revenue; new revenue, aka taxes, is anathema to the Republicans.

The catch for Democrats? They may not be able to get Sen. Jim Hargrove (D-24, Hoquiam) back over to their side; Hargrove, a longtime close friend of Carrell, had been courteously voting with Republicans while Carrell was in the hospital during the last month of the session, out of respect for the actual Republican advantage.

If Hargrove did move back into the Democratic camp, the vote count would be 24-24 and Democratic Lt. Gov. Brad Owen would be in a postiion to break the tie and vote with his party.

Not so fast, though. Evidently Hargrove isn't the only piece of the puzzle. Two fiscally conservative Democrats, who had mostly stuck with the Democrats so far this session—Sens. Brian Hatfield (D-19, Raymond) and Steve Hobbs (D-44, Lake Stevens)—may defect and foil any Democratic hopes.

In a bad omen for Democrats, the pair, while not defecting to join dissident Democratic Sen. Rodney Tom's (D-48, Medina) Republican-dominated Majority Coalition Caucus at the beginning of the session in the GOP coup, both accepted Tom's offer to chair committees and joined with the MCC early on to pass one of the Republican priorities—and now one of the MCC's 33 must have bills—scaling back workers' compensation. 

In a bad omen for Democrats, the pair both accepted Tom's offer to chair committees as the session began and joined with the MCC early on to pass one of the Republican priorities, scaling back workers' compensation.3. Here's a little follow-up to a piece we ran late last week (an "Isn't it Weird" item) that challenged the GOP for scoffing at the Democratic transportation funding package. Washington State Republican Party Chair, former radio talk jock Kirby Wilbur, in shock radio mode, said the Democratic budget prioritized stormwater cleanup over the basics.

Democratic house transportation chair Rep. Judy Clibborn (D-41, Mercer Island), who's proposing an $8.4 billion package funded by a .10  gas tax, put out a press release saying: "There is currently almost $1 billion in the package for maintenance, operation and preservation. This money is dedicated to ensuring the safety and functionality of the bridges, tunnels and roads that connect our state. That’s far more than what is allocated to stormwater, and it’s vastly more than we will have without a revenue package."

And how much for stormwater? According to house staff: $26 million.

4. Mayor Mike McGinn held his campaign kickoff fundraiser breakfast yesterday at the event space at 415 Westlake in South Lake Union. It was a standing room only crowd packed with bike lefties such as former Cascade Bicycle Clube director Chuck Ayers, hotel and restaurant worker leader Rick Sawyer of UNITE HERE, and minority leader, El Centro de La Raza leader Estela Ortega.

McGinn, who was introduced by local labor legend Robbie Stern (the former Washington State Labor Council leader), talked about police reform, emphasizing local solutions rather than DOJ imposed ones.

The development establishment types—Vulcan's Ada Healey, Touchstone's A-P Hurd—who "shook hands with McGinn rather than hugged him," as one attendee poetically put it, describing McGinn's Tuesday night private fundraiser at the International District's Nagomi Tea House to win over urbanist developers, were reportedly not at the Westlake fundaraiser yesterday morning. However, Jon Scholes, the Downtown Seattle Association lobbyist who hosted the Tuesday night meet and greet, was there, reportedly sitting next to McGinn.

(Note: An earlier version of this post reported that Scholes was not in the house on Thursday morning. Scholes, who butted heads with McGinn over the tunnel, told us earlier in the week that he's worked well with McGinn on some recent issues such as the South Lake Union rezone, though he has not endorsed any candidate. We have a message in to Scholes see if he has since endorsed McGinn. Update #2: Scholes tells us he was invited to the event by a board member of the Seattle Hotel Association, Clise Properties' Howard Cohen, and has not endorsed anyone in the mayor's race.)

5. Speaking of packed: The lefty nonprofits—including Fuse, Sightline, the Cascade Bicycle Club, the Washington Environmental Coalion (along with innovators like passivhaus architect Rob Harrison) who all rent space at the Vance Building on 3rd Avenue downtown, held their annual open house walk through last night where Fuse was serving up flaming OJ's with rum.

6. Josh will be on KUOW's Weekday this morning to discuss the week's top stories. Tune in 94.9 FM at 10.


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