As a government shutdown draws near, Democrats are spelling out the tax exemptions the party wants to close in order to raise revenue.

Share story

OLYMPIA — Democratic leaders Monday released a new budget proposal that would end or limit several tax breaks in order to fund education initiatives and teacher pay.

The plan would raise about $356 million for the 2015-17 budget cycle, which tracks with what Democrats and Gov. Jay Inslee said last week would be necessary to write a sustainable budget.

The proposal would repeal tax exemptions that benefit oil refineries and that bar a sales tax on bottled water, according to an overview of the plan released Monday.

It would also limit exemptions on sales taxes collected from out-of-state residents and a real-estate tax on foreclosure sales.

The proposal also repeals some preferential state business-and-occupation tax rates, including on royalty income and for resellers of prescription drugs.

If adopted, the new revenue plan would fund early-education programs and a cost-of-living pay raise for teachers at a higher level than Republican proposals, and would freeze college tuition for two years.

Along with the revenue plan, Democrats released an alternative budget proposal that closes no tax breaks and “merely keeps the lights on for another two years,” according to a statement by House Majority Leader Rep. Pat Sullivan, D-Covington.

Among other things, the plan would fund state-worker pay raises, increase mental-health programs and boost K-12 education spending as required under the state Supreme Court’s McCleary decision. The plan would also freeze tuition at state colleges and universities for one year.

Sullivan described the proposal as “a backup plan designed to meet the very basic needs of the state and avoid a shutdown.”

The latest offer by Democrats comes as a government shutdown draws near. If lawmakers can’t agree on a new budget before July 1, parts of the state government will close down.

House Democrats had originally proposed a $38.8 billion budget that included about $1.5 billion in tax increases and other new revenue. Republicans have argued that the more than $3 billion in increased revenue projected from existing taxes should be enough to fund government.

The new proposals were scheduled for a public hearing at 3 p.m. Monday in the House Appropriations Committee.

Lawmakers will also hear a proposal to delay the full implementation of Initiative 1351, the K-12 school class-size reduction measure that voters approved in November.