Senator Linda Evans Parlette Checks in from Olympia

March 5, 2010

Dear Friends,

I am sending this message out a bit earlier than usual this week so I can share with you right away all of the big things that are happening here at the Capitol.

On Saturday the Senate passed its transportation and operating budgets. On Monday the House majority party proposed a package of taxes to support its already-proposed budget.

A special highlight of the week was Tuesday, when we welcomed the 2010 Apple Blossom royalty to the Capitol.

Most of the week was spent voting on House bills in the Senate Ways and Means Committee and on the Senate floor. The legislative session is scheduled to end next Thursday, March 11. There is much work to be done before we can leave Olympia - the biggest being passage of a state budget.

We are expecting to work long hours over the next week, including Saturday and Sunday.

Bill would raise taxes 26 ways

One bill before the Senate Ways and Means Committee is Senate Bill 6873, which raises 26 different taxes, including:

• Vehicle trade-ins. Eliminates the sales tax exemption on vehicle trade-ins. This would affect anyone who trades in a car or farm equipment - you would no longer be able to deduct the value of your trade-in when paying sales tax on another vehicle. Voters authorized this exemption in 1984 through Initiative 484; the measure passed with a 69 percent "yes" vote.

• Food growers. Removes the sales tax exemption for fertilizer, spray materials (including crop protection products) and chemical sprays used in agriculture unless farmers use higher-cost, organic products. This sales tax exemption has been in place since 1943; limiting it would raise agricultural taxes by $84 million over three years.

• Border communities. Since 1965, Washington has exempted sales to Oregon, Alaska, Montana and Alberta residents from the sales tax. SB 6873 proposes discontinuing that exemption at the point of purchase and requiring non-residents to apply instead for refund of sales tax paid. This will seriously affect employers in our border communities that depend on sales to out-of-state residents.

• Jobs in a small community. Since 1997, purchase of coal used at the Centralia thermal generating plant has been exempt from the sales tax. The exemption was contingent upon the plant demonstrating it was making progress toward reducing its sulfur dioxide emissions - a condition it is meeting. This bill eliminates their exemption, which could very likely result in the plant's closure and the elimination of about 200 jobs in a community with already very high unemployment.

• Other taxes. The bill also proposes imposing an excise tax on private aircraft, limiting the manufacturing and equipment tax exemption for wind power, increasing the tax on brokered natural gas, increasing taxes four-fold on prescription drug retailers, and taking away the B&O tax credit for creating manufacturing, research and development, or computer service jobs in rural counties or community empowerment zones.

I have heard from so many people who will be negatively affected by this measure. It will undoubtedly cost even more people their jobs and affect our economic recovery. We are expected to vote on this bill in the Senate Ways and Means Committee soon, perhaps as early as today.  It is my sincere hope that at least some of these onerous provisions will be removed from this bill in committee.

Income tax bill receives a hearing

Yesterday Ways and Means Committee members received a last-minute notice that the Senate Ways and Means Committee would hold a hearing on an amended Senate Bill 6250, implementing a state income tax on individuals making more than $200,000, head-of-households making more than $300,000 and couples earning more than $400,000.

There are several concerns with this proposal, including:

• The federal income tax also began as a tax on the "rich," but was quickly amended to apply to incomes across the spectrum; and

• The imposition of an income tax is not a solution to Washington's budget challenges. California has all three taxes - income, property and sales - and its economy is in even worse shape than Washington's.

• There is a question whether it is lawful to impose an income tax without amending the state Constitution.

Members of the minority party did not see the bill before the hearing, and the public received only two hours' notice. Despite that fact, several business owners and citizens came to testify against the bill, saying they were driving home and heard about the hearing on the radio, turned their cars around and came to Olympia to implore the Legislature not to impose a state income tax.

Although the public hearing took place yesterday, the committee did not vote on SB 6250. It's not clear if this proposal will move forward.

Senate passes operating budget

The Senate passed its proposed supplemental 2009-11 operating budget on Saturday. Senate Bill 6444 includes:

• Tax increases of more than $3 billion over the next three years;
• Reliance on an assumed $583 million in additional federal funds; and
• Transfers of about $500 million from the Rainy Day Fund and other accounts.

Although the budget presumes increased taxes, most of the bills that implement those tax increase policies (including SB 6873, mentioned above) have yet to pass the Senate Ways and Means Committee.

It is not responsible to pass a budget first, then hope to get enough votes to put the bills necessary to implement that budget into place. That's putting the cart before the horse.

With just a week left in the legislative session, it will be interesting to see which taxes the majority party brings forward in the end to pay for the budget that has already passed. Before we leave Olympia the House and Senate must pass their budgets, decide how to pay for the spending in them, and come to agreement on a single spending plan.

Senate transportation budget includes extension of wildlife fence

On Saturday the Senate passed its proposed supplemental transportation budget, Senate Bill 6381. Unlike the operating budget, this budget received wide-spread, bipartisan support

It included funding for an important safety project in our district - extension of the wildlife fence along the west side of US 97A from Rocky Reach Dam to the north of Spencer Canyon in Chelan County.

The corridor along US 97A is one of the most dangerous for vehicle-wildlife collisions, posing a serious safety risk to the driving public and wildlife. It has one of the highest mule deer and bighorn sheep mortality rates in Washington.

Construction of the wildlife fence's first 4.5-mile section, from milepost 207.98 to 212.10, was completed Dec. 5. Phase one ended in a location that permits animals to get around it and wander onto the highway, putting drivers and animals at risk. That's why it's important to extend the fence as soon as possible. 

The Senate transportation budget passed Saturday increases the appropriation for the wildlife fence by $200,000 in the 2009-11 biennium. This will allow the existing fence to be extended an additional 1.5 miles further south to the quarry this spring. 

The fence's final stage is expected to be completed in spring of 2011. When complete, it will run from milepost 203.13 to milepost 212.10. In addition to public funding, many private groups, including the Wenatchee Sportsmen's Association, have contributed funding to this project.

House unveils tax package

Earlier this week the House majority held a news conference to explain which taxes it wants to raise to pay for its already-released budget proposal. In short, the tax proposal (House Bill 3191):

• raises taxes by $758 million;

• extends the sales tax to bottled water, candy and gum, plus elective cosmetic surgery and janitorial services;

• increases the tax on cigarettes by $1 a pack;

• levies a .5% B&O tax increase on lawyers, accountants and other professional service providers (excluding real estate); and

• eliminates about $385 million in tax incentives.

On Monday, Gov. Gregoire said she prefers the House tax package to the Senate package. Also this week, a (Tacoma) News Tribune online poll asked this question: 

Which strategy do you favor to balance the state budget?

Here are the responses:

• Senate tax package: 11 %

• House tax package: 28%

• Neither; cut deeper, no tax increases and no loss of tax exemptions (incentives): 61%

Estate and trust bill passes the Legislature

On Tuesday, the House of Representatives unanimously passed Senate Bill 6831, a measure I prime-sponsored aimed at protecting the public from misinterpretation of a spouse's final wishes regarding his or her will.

In December 2009 the federal law regarding the estate tax lapsed. Many wills and trusts are affected, as they were drafted to refer to federal estate tax laws. Since the federal bill lapsed, many of these wills may have to be decided in court. Depending on what a judge decides, a child or spouse could be left out of a loved one's will - even if the deceased was clear that they should be included.

SB 6831 will not increase or decrease the estate tax for Washington citizens. It simply addresses the gap in federal law by ensuring Washington estates and trusts refer to the federal estate tax laws as they existed before the exemption lapsed. Bottom line, it provides a one-year "patch" until Congress can address the issue.

The bill is now before Gov. Gregoire for her consideration.

Welcome, Apple Blossom royalty!

Tuesday, March 2, was "Apple Blossom Day" at the state Legislature. It was an honor to sponsor Senate Resolution 8711, celebrating the annual Washington State Apple Blossom Festival and recognizing its importance to the city of Wenatchee, the Wenatchee Valley and Washington.

Apple Blossom Festival Queen Margaret Robinson and princesses Laurie Bazan and Lauren Ferguson were at the Capitol to accept the honor on the community's behalf and invite legislators to attend the festival that runs from April 22 through May 2.

Here is a picture from the day, plus another of the electronic reader board in the Senate chambers during the resolution's adoption. It was a pleasure to welcome the Royal Court to Olympia and introduce them to my fellow senators!

Weekly video update

I invite you to watch my latest weekly video update here.  

In closing...

I hope you these e-mail messages continue to be helpful as you follow the Legislature's activities this year. You can expect at least one more e-mail from me next week as we wrap up the session; then, as always, I will send periodic messages to you during the interim.

Thank you for the continuing privilege of serving you in the state Senate. I have very much appreciated your help and feedback this year as the Legislature makes difficult choices. If there is anything I can do for you, please don't hesitate to call or send a letter or e-mail. I am always happy to help! 

All the best,

Linda

LINDA EVANS PARLETTE
Washington State Senator, 12th District