This Washington

Hostage Crisis

Democrats accuse Senate Republicans of holding key revenue bills hostage for ideological reforms.

By Josh Feit June 10, 2013


Sen. Doug Ericksen

As opposed to the trio of conservative policy bills that the Republican-dominated Majority Coalition Caucus passed and defiantly sent over to the Democratic house this weekend, the MCC had a hearing on  three bills in ways and means committee this afternoon that the Democrats support—a trio of revenue bills worth about $300 million to the state. And, the MCC says, they expect to get the bills to the rules committee and on the way to the floor in the next day.

"This is a budget. It's a finished product. I take umbrage with the comment that somebody says we're trying to take hostages. This could go to the other side. They could vote on it. We could go home."--Republican Sen. Doug Ericksen

Colloquially, the three bills are known as: The Bracken bill, the telcom bill, and the out-of-state sales tax bill.

The Bracken bill (the name is a reference to a court case that allowed couples to shinny out of paying the estate tax) closes that unintentional loophole. Initially, the GOP had flirted with using the opportunity to scale back the estate tax by raising the threshold and scaling back the rate. However, they would have been throwing away nearly $100 million next biennium, money that voters' approved of (I-920, the estate tax, passed by 62 perent in 2006). The only change the MCC is making now is allowing an exemption for family businesses which knocks the revenue down $30 million this biennium (from $160 million to $133 million) and $50 million next biennium (from $78 million to $30 million). The state is scheduled to start issuing rebate checks to couple's on Friday if the the loophole isn't fixed. 

The telecom bill (also a response to a court case—one that cell phone companies won against the state) would make traditional landline companies pay a phone tax that only cell companies have been paying. The change will bring in about $106 million (and save the state form paying out hundreds of millions to cell companies as well.) It passed the house 74-18. 

•Finally, there's the house repeal of the non-resident sales tax exemption—worth about $47 million.

So, has the Republican-dominated seante and liberal house Democrats finally found agreement?

"Without any question, they are holding the budget process hostage. The ransom is these three bills."—Democratic Majority Leader Rep. Pat SullivanNot so fast. The house, which already passed the three revenue bills, has accused the MCC of holding the budget hostage for ideological reforms. "They're holding the budget hostage for the passage of three policy bills," says Democratic house majority leader Rep. Pat Sullivan (D-47, Covington).

The MCC—sticking to their "Reform before Revenue" mantra—says before the revenue bills actually get a vote on the floor (today's committee vote is just a good faith gesture), the house needs to pass the three bills the MCC sent over this weekend: a workers' comp bill (which makes it easier for  employers to offer one-time settlements to injured workers); an education reform bill (which allows principals to turn down teachers that have been reassigned to their shcools); and a budgeting guideline bill (which caps non-education spending at six percent of new revenues).

The MCC says the workers' comp changes, for example, will save the Dept. of Labor & Industries' workers' fund $1 billion over ten years (the fund is not part of state budget, though; it's funded by employees and employers). Labor argues that the savings will come from shortchanging injured workers and will eventually cost the state itself more in public health costs. We interviewed  L&I earlier this year for a reality check on both sides' claims.)

Republican state Sen. Doug Ericksen (R-42, Ferndale) says the MCC is not playing hostage with the $300 million. "We're passing a budget off the senate floor today," he said this weekend during the budget vote. "If the house of representatives came into session and passed this bill, we could go home. There are no hostages being taken. This is a budget. It's a finished product. I take umbrage with the comment that somebody says we're trying to take hostages. This could go to the other side. They could vote on it. We could go home."

Democratic house majority leader Rep.Sullivan sees it differently. "The budget won't work without that revenue," he says referring to the $300 million. And "the ransom" Sullivan says are the MCC's policy bills.

"Without any question, they are holding the budget process hostage. In order to pass the budget, the ransom is these three bills. We haven't gotten to the point where we're talking about the budget. They won't go there because they want those hostage bills."


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