Teachers, parents and others appeared before a Senate committee in Olympia to support a Republican proposal to raise billions of dollars through a capital-gains and business-and-occupation tax. It’s the latest twist in the budget drama.
OLYMPIA — Dozens of teachers, parents and others appeared before a state Senate committee Wednesday to support a Republican proposal to raise billions of dollars through tax increases, including a new capital-gains tax.
Actually, these folks gathered at a public hearing to speak about a Senate Republican version of the Democratic House tax package.
And the Republicans, who control the Senate, actually oppose the proposal.
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Call it a soap opera or a legitimate philosophical debate: At least legislators are sort of working.
With state budget talks stalled, lawmakers are in their first week of a special legislative session.
Their chief tasks this year are to write a 2017-19 state operating budget, and comply with the state Supreme Court’s K-12 education-funding order known as the McCleary decision.
Legislators are quietly discussing education policy. But Republicans have said they won’t negotiate on the budget until Democrats vote on their own tax plan. Wednesday’s hearing was an attempt to push Democrats closer to a vote.
The hearing drew more than 100 people to testify on SB 5929, a bill sponsored by Sen. Dino Rossi, R-Sammamish, which is supposed to mirror the House Democratic proposal.
“After this hearing, hopefully, they will go forward and pass their tax bill out of the House,” Rossi said.
That brought out supporters of tax increases to fund schools.
“The people of Washington deserve the best schools in the nation, and only new revenue can get us there,” Stephanie Scott, a parent, told lawmakers.
Democratic lawmakers, meanwhile, used the hearing to build a case for their proposed taxes.
Sen. Kevin Ranker, D-Orcas Island, asked legislative staff to outline how many people would be affected by the proposed 7 percent tax on capital gains for earnings above $50,000 for joint filers, and $25,000 for single filers. The answer: about 48,000 people.
Republican this year have added a new twist to the debate over revenue, by trying to force Democrats into voting on their proposed taxes.
They pushed such a vote last week, pulling versions of the Democratic capital-gains and business-and-occupation taxes to a vote on the Senate floor.
The votes, both taken the day Gov. Jay Inslee called a special session because lawmakers couldn’t finish their work in the regular session, failed unanimously.
Democrats called it a stunt. Republicans called it a victory.
At Wednesday’s hearing, teachers weren’t the only people testifying.
Business owners spoke against the proposal to hike business-and-occupation tax rates 20 percent — but exempt businesses that have less than $250,000 in annual gross revenue from paying the tax.
Matthew Welch, of Auburn Volkswagen, said it would harm his business.
“We love our teachers, we want to fund education, but by raising B&O by 20 percent, you’re making an already suffocating tax crippling,” Welch said, before being asked if there was another tax he favored.
That prompted the business owner to advocate for something Republicans often campaign against: an income tax.
When looking at acquiring new businesses, “We’re actually looking at states that have an income tax, because when you don’t make it, you don’t pay it, and if you make it, you pay it,” Welch said.
“So we’re totally open to a form of tax … and we’d love to sit down and talk about that,” he said.
Senate Republicans this year have argued that existing revenue can fund the state operating budget. They drafted a proposed budget that attempts to do that.
Republicans have proposed raising some new revenue for education, with a plan to replace local school levies with a standardized statewide property tax.
That proposal would hike property taxes in “property rich” school districts like Bellevue and Seattle, while cutting taxes in “property poor” districts elsewhere.