Article by Erik Smith. Published on Monday, March 22, 2010 EST.
Nixes Sales Tax Hike, Sets Up Collision With Senate – The First Hour of the Debate
By Erik Smith
Staff writer/ Washington State Wire
OLYMPIA, March 22.—Round Two of the weekend’s tax votes in the state Legislature took place in the state House Saturday afternoon, as the Democrats who control that chamber passed their own $788 million tax-hike plan 53-42.
As Republicans railed helplessly against a tax increase they said would cripple the state’s economic recovery from recession, Democrats argued that state services can’t be cut any further. It’s a debate that has been raging all session long, and it’s not the last time they’ll have it.
With the House vote on Senate Bill 6143, negotiators can now go behind closed doors and start their dickering. The top issues: Whether to raise the state sales tax, as the Senate prefers, or to end a somewhat larger list of tax exemptions and impose a business and occupations tax surcharge on a somewhat larger group of service businesses. Among the biggest differences: The House hopes to limit business and occupations tax deductions for banks, and wants to impose sales taxes on designers of custom software.
The House plan is favored by Gov. Christine Gregoire.
House Drops Tax Avoidance Plan
Perhaps the most significant decision of the day came as the House Democrats dropped a plan to give the Department of Revenue authority to crack down on shell corporations crafted to avoid taxation. House Finance Committee Chairman Ross Hunter, D-Medina, who has been pushing the “tax avoidance” crackdown all session, said he reluctantly was giving up on the idea for now, because the idea has encountered opposition from the business lobby, but he still might take another whack at it.
As in the Senate, the House vote appeared close, as six Democrats from “swing districts” peeled off and voted with Republicans against the tax plan. But the vote itself was never in doubt.
The First Hour of the Debate
It was the second time the tax bill had come to the floor – the original vote took place during the Legislature’s regular session, but had to be repeated because the Legislature has entered a special overtime session. And there was a marked difference in the argumentation during the two-hour debate, as Democrats who had argued for the tax measure with limited enthusiasm the last time came charging forward.
Republicans, meanwhile, argued just as passionately against the tax increases, and for the first hour the rhetoric flowed smoothly and eloquently.
Overheard on the floor, from a Democratic member, after all had been said: “Democrats did a good job this time.”
Consider it a warmup for the main event.
Here’s a complete record of what was said on the floor during the first hour of the debate. Some remarks have been edited slightly for readability:
What a No Vote Means
State Rep. Marko Liias, D-Mukilteo: “We face some important decisions today, and we know from our discussions on the operating budget that the fate of our operating budget really truly depends on providing new revenue to support a balanced budget. We are required to pass a balanced budget.
“I know we’ve heard through the course of the debate on this bill – this is the second time, multiple times, we’ve talked about these issues – there are good members on both sides who have concerns and want to vote no on this issue. And Mr. Speaker, when you look at the decisions that are implicated in our operating budget by voting no on this, I think that is important to consider when you vote no on this, you are voting no on healthcare for a three-year-old girl in Walla Walla or a seven-year-old boy in Ellensburg. When you vote no on this bill you are voting no on an extra teacher in Aberdeen or a community college instructor in Spokane. When you vote no on this bill, Mr. Speaker, you are voting no on additional state troopers that will keep our highways safe for the citizens of Washington.
“We all have the constitutional right to vote yes or no on any particular bill, but we need to weigh what a no vote means on this bill. And that is why I’m voting yes. I am voting yes on this bill, because I am voting for that child in Ellensburg, that child in Aberdeen or Mukilteo, to make sure that they have a good teacher that is ready to help them achieve their goals.
“I am voting yes because I want to make sure that community college instructor in Spokane has the resources they need to do their job. I’m voting yes because our operating budget and our balanced budget depend on new revenue in these tough times. I’m voting yes, because that’s what the people of my district sent me here to do, to carry out a vision for society that’s compassionate, takes care of the least among us, prepares for the future, invests in our children and moves our state forward.”
What a No Vote Really Means
State Rep. Ed Orcutt, R-Kalama: “I would like to tell you what a no vote really does. Quite frankly, Mr. Speaker, I’m expecting that we are going to have bipartisan opposition to this bill today, as well we should, because a no vote on this bill is a vote against killing jobs in this state. It’s a vote against killing jobs in this state. We’re looking at a tax package, Mr. Speaker, of $800 million in new taxes that this economy cannot afford, that our working families cannot afford, our laid-off families really cannot afford, our employers can’t afford, because it will lead to more layoffs. And that’s why it should be a bipartisan no vote. Mr. Speaker, the implications of this are far greater than what you have heard already today, and what you will hear I am sure throughout the rest of this debate.
“Mr. Speaker, there was a study done by the Washington Research Council, and I want to be very clear, because the gentleman from the 11th [Zack Hudgins] misunderstood what I said last time when we debated the tax bill. The Research Council did a study, and they took all the different tax proposals, ran them through our tax model and our economy model here in the state of Washington, and they took an all cuts budget and ran it through, and what they found was that with an all-cuts budget, there would be a loss of 8,600 jobs. Now remember, those will be public sector jobs. If they do a $1 billion tax increase, it will cut 11,200 jobs to 12,250 jobs. Those are private-sector jobs, Mr. Speaker, private-sector jobs. So not only would we be placing public-sector jobs in front of private-sector jobs, the net loss of jobs as a result of a package like this, Mr. Speaker, would be over 2,600 people, maybe as many as 3,650 more people sitting on the unemployment lines, than if we did an all-cuts budget. That’s the difference in the job losses between an all-cuts and a tax-increase budget.
“Mr. Speaker, there are a lot of provisions in this tax proposal, which incidentally, Mr. Speaker, if you look at the striking amendment, it says strike everything after the enacting clause, and what it inserts is 133 pages of $800 million of tax increases to the citizens and the employers in this state. And it’s something we got an hour and 40 minutes ago. Staff worked on it all night, but we got an hour and 40 minutes to look at it. Now, some of the things that are in here Mr. Speaker – new interpretive authority for the Department of Revenue. It’s on the nexus issue, and you’ll hear people say well, we’re just trying to get out-of-state companies to pay their fair share. Well, let me tell you what that will do to one of the in-state companies that still has its headquarters in the state of Washington, Mr. Speaker.
“It will add $1.6 million in their costs, just the nexus provision alone, because now there will be a B & O tax that will be paid on the interest they pay on their airplanes. This is a business that is based in this state, a business that has laid off hundreds of employees in this state, and quite frankly, Mr. Speaker, when we look at the hundreds of employees they’ve laid off in this state, they don’t even look at the ones who work at the Portland airport, who live in the state of Washington. They are counted in Oregon. Those people live in my district, and I know they live in my district, because I hear from these airline pilots. These are people that are going to be negatively affected by this, Mr. Speaker. A $1.6 million hit. They have got to add 600 flights a year to make it up.
“And that’s before we add the bottled water tax to them, because they don’t resell the bottled water, so they’re going to have to pay their tax as if they are the final buyer. They are the consumer and they give it away on their flights. That’s another hit, and we don’t know whatever other taxes are still yet to come. Mr. Speaker, that leads to more layoffs in that company that has their headquarters here.
“Mr. Speaker, I ask you, what is the wisdom of adding taxes to a company that has hundreds of airplanes and hundreds of flights, and which could easily get all of their corporate executives onto a plane on a one-way trip? Haven’t we seen enough of that in this state? Mr. Speaker have we not seen enough of businesses of our employers putting their executives on planes on a one-way flight to another state? Have we not seen enough jobs go on a one-way flight to another state?
“Mr. Speaker, the things that happened last year made our climate in this state even worse. You will hear a lot of statistics. The Tax Foundation said we moved from 12th to 9th. If you look at the raw score, Mr. Speaker we actually got worse. Our actual score got worse.
“The impact on their ability to employ people got worse. What do you suppose the $800 million in new taxes will do to them? It will make it worse. We will see more jobs exported from this state.
“We talked about the tobacco tax last night. Those jobs will be exported from the state and our retail stores.
“Mr. Speaker, when we take away the out-of-state sales tax exemption, retailers in Longview, retailers in Vancouver, retailers in Walla Walla, retailers in the Tri-Cities, retailers in Spokane will lose business. When they lose business, we lose B & O tax, because they’re not doing as much business. When they’re not doing as much business, what happens? They lay people off, Mr. Speaker.
“I could go down through the whole list of items in this. There’s well over a dozen new taxes, new taxing authority, in this proposal.
“The bottom line, Mr. Speaker, is this is $100 million in new taxes that our families can’t afford, our employers can’t afford and our economy cannot afford.
“As far as the services that were talked about by the previous gentleman, we can fund children’s health care to the point that we need to do it. For education, for teachers, we can fund that, Mr. Speaker. It’s a matter of priorities. It’s a matter of how this body prioritizes these folks.
“The budget is not an issue of whether we tax people more. It is not a trade-off. That is not the action that needs to take place here today. Mr. Speaker, we do not need to raise taxes to keep teachers in the classroom. We do not need to raise taxes to provide healthcare for those who truly need it. We do not need to raise taxes to protect the elderly and to protect citizens in our streets. Education, public safety, children and seniors can be protected without these tax increases.
“And don’t doubt for a second this bill is not necessary. It is ill advised and it will cost jobs. Please vote no.”
Taxes Are Investments
State Rep. Larry Springer, D-Kirkland: “One of the struggles we always have when we debate budget items like this is the numbers can become mind-boggling. We can really get down into the reeds of various studies that have been done around the country. We can make allegations about what it means for job loss or job preservation. I want to share a couple of numbers to help make it as simple for Washingtonians to understand as possible.
“There is no doubt, no one argues, that we have faced in the last two years the worst budget deficit in state history, and I think what’s important to remember here is that this is this has been a two-year problem. This is not just this session’s problem. It’s also last session’s problem. I want to remind everybody that when we came into session in January 2009, we faced a $9 billion budget deficit. We solved that problem. We closed that problem with help from the federal government, and without raising a single Washington tax, we closed $9 billion.
“We arrived this year in the second half of that same budget with an additional $2.5 billion to $2.8 billion deficit. That’s a roughly a $12 billion deficit. We have closed it with $800 million in taxes, not a billion. That’s less than 7 percent of the solution we have, out of our budget, for every dollar of taxes we have raised. Those are fairly simple numbers.
“I also want to make a note here that while we talk about the impact of this on out-of-state businesses and in-state businesses, let me share some impacts that these budget deficits and budget cuts have had. There are people who need hospice care, there are people who need adult day health services, there are kids who are going through K-12, there are out-of-work workers looking for retraining opportunities, there are kids who want to go to college. We have closed this budget gap, and $800 million dollars in additional taxes will help us make investments in early education, in K-12 and preserving class sizes in K-4. These investments will make sure that when a dying patient or a dying family member needs hospice care, it will be there. These investments and these additional taxes that we have raised will assure that kids in Washington state have access to Apple Health, that they don’t want for health care.
“And these $800 million in taxes will in fact assure that roughly 12,000 Washington students will have an opportunity to go to college. If we want out of this recession Mr. Speaker, those people need training; they need to be educated for the next wave of jobs of the future. We have invested in that. I’m proud to vote for this budget, and I encourage the body to do the same.”
We Don’t Need to Raise a Penny
State Rep. Gary Alexander, D-Olympia: “Well, I just want to remind the gentleman from the 45th District [Springer] and you, Mr. Speaker, how we got here. We got here by spending twice as much money as we took in, $8 billion, Mr. Speaker. If we had just stayed within our revenue for the five years preceding the point where we’re in now, we wouldn’t be talking about this $800 million. We wouldn’t be talking about the seven or 10 percent cuts. Mr. Speaker, our budget in this biennium, when we’re all through and done, when we’re done with this process, and we pass this budget on the floor, Mr. Speaker, with the exception of higher education, we will have more state employees than we started out with.
“Mr. Speaker, we did not we did not make significant reductions. We did not take drastic cuts in state employment. We did not do any reform efforts, Mr. Speaker, and yet we’re going to stand here and impose taxes that will put another 12 to 14,000 people out of work, on top of the 178,000 already out there. Where does that make any sense? Where do we think we get the revenue to generate government services, not only today but in the future, Mr. Speaker?
“I’m afraid what this resembles to me is taking your credit card and putting a down payment on a multi-billion dollar purchase that is well beyond your credit limit. What bank or credit union loaning operation in the entire world would loan you that kind of money? They wouldn’t do it. This budget is not balanced; it’s not balanced at all.
“And the good gentleman from the 45th seems to forget about how much money we’ve assumed from one-time sources. A billion dollars from the capital budget, almost $5 billion from the federal government, which Mr. Speaker, we’re assuming on bills that haven’t even passed.
“Mr. Speaker, we did not need to add even one tax dollar to this budget. And Mr. Speaker, do we for one minute think when we pass this budget this session and this tax package, we won’t be back here with even a more difficult issue next year?
“Where is the word sustainable in this process? I don’t see it. I don’t see it here at all, Mr. Speaker.
“And believe me, it’s not 4 to 1. It doesn’t even come close when we talk about all the sources of money. We’re using one-time monies, tax increases, Mr. Speaker. We didn’t balance this budget in terms of efficiency, reform, reducing the footprint of government, prioritizing government, all those things that we talk about, were not utilized. We just said let’s get rid of the Taxpayer Protection Act. Let’s blow it off the face of the map; let’s not make sure we’re more responsible to our taxpayers and businesses out there. Let’s just get rid of that and increase taxes.
“Mr. Speaker we do not need to increase any of these taxes Mr. Speaker, I can talk about many of them individually. The aircraft tax – I have a major aircraft employer in this community and they are very, very concerned.
“Mr. Speaker, we have very few manufacturing companies left in the state. Are we going to send them all out? Send them all away? We just somehow think that private investment is bad, why don’t we get back and allow the trust and integrity of the process to start here, right now, by living within the revenue they have already provided us, and encourage and promote legislation [so] that the private sector will invest in the future.
“Mr. Speaker, when they invest in the future, we will have the resources coming back to support all the health care programs all the educational programs and all the public safety programs we need.
“Mr. Speaker before I sit down, I was here in the early 80s. We took a 15 percent reduction in our government budget in the early 1980s. Fifteen percent. We’re not even hitting half that number right now. Mr. Speaker, if I asked those people today who took that 15 percent reduction, if you can recall what the impacts were, they can’t, because they restored them all, and they have grown, and because in doing so, Mr. Speaker, a lot of efficiency took place.
“So Mr. Speaker, we don’t need this $800 million. We don’t even need one penny in tax increases.
“I’m not quite ready to quit rolling up my sleeves and balance this budget without new taxes.”
My Brother’s Keeper
State Rep. Dave Quall, D-Mt. Vernon: “What motivates me today to stand in support of this revenue package is how it’s going to help the children of our state. The other day I shared with this body how I had three students who came to my office with their superintendent. They were non-English speaking students when they started in kindergarten, but because of K-4 enhancement, small class size, they shared with me individually that it was because of the class-size enhancement that they were able to catch up. And now in their junior and senior year are stellar students.
“So I stand in support because it takes dollars to keep that class-size enhancement. I heard from superintendents and principals and teachers and parents, and the one thing they stress beyond other areas is the class-size enhancement.
“Also we had quite a debate a year ago, here at this time, on levy equalization. This revenue package is going to restore $165 million to let equalization, and that’s a fair thing to do because we know that there are these property poor districts that don’t receive the dollars necessary to run their schools.
“If I might close on a little thought, this is kind of a theological thought, if you don’t mind, Mr. Speaker, I know you like theology. You know, in the Old Testament, it raises the question of, am I my brother’s keeper?
“I think a lot about that. I think a lot about what were doing. This budget is taking care. I’m saying I am my brother’s keeper, because when I look at people with mental health [problems], seniors who are struggling to make ends meet. In looking at our public schools and how we could save money by not funding K-12 enhancement and not funding levy equalization. I am motivated to stand here today because I am my brother’s keeper.”
We’re Taxing Spam, For Crying Out Loud
State Rep. Bill Hinkle, R-Cle Elum: “Well, let’s wax theological for a moment. Nowhere in the Scripture does it say that we should take money from people to give to their neighbor. We do, however, see in the 12th chapter of Mark, where the rich came by the treasury and they threw in great sums of money to brag about how great they were, and then there was a certain poor widow who came by and threw in two mites because that was all she had. She gave of her own willingness.
“That’s a lot different, Mr. Speaker, than government coming by and taking the last dime she had. That would be a lot different, wouldn’t it? We would call her a victim, had the government done that, had the tax collectors gone by and grabbed her last two mites. She would be a victim.
“That’s what we’re doing with this budget. We’re not creating here. We’re creating no ability or self-sacrifice in our communities. What we’re doing is we’re robbing the poor.
“We’re taxing Spam, for crying out loud. When I was eating welfare cheese, Spam was the only meat we got. In fact, Mr. Speaker, in fact when we got fried Spam and eggs I was living the high life, because that was the only meat we got at times. And we’re going to tax this now.
“I know a lot of you middle-class and upper-class folks in the body today don’t eat Spam. In fact, you shun the sight of it, but let me tell you that’s the protein they get. Canned meat and cheap meats like that are things that people that are having tough times eat, and we’re going to tax that now.
“On top of that, we’re going to tax bottled water and a number of other things here. This is not nobility, Mr. Speaker; please let’s not have that talk. Let’s not confuse historical theology and historical giving, historical self-sacrifice, historical love and communities with what we’re doing here.
“This is a taking, the power to tax. This is the power to take from the individual. This is not what our forefathers stood for when we started this country. Mr. Speaker, we understood giving. There was a sense of individual responsibility, as you read about with the poor widow, and we saw that when this country was founded, there were people that helped each other.
“And now we’ve come to the point where everybody who has a sense of entitlement shows up in the galleries or is wearing colored shirts in the hallway and demanding that we give to them, that we take from their neighbors and give it to them. Now you tell me that’s justice. You tell me that’s what our forefathers died for. You tell me this is our history and this is the inheritance of our fathers. I don’t think so. This is a day when I’m ashamed, personally, when I’m ashamed to see what we’re doing as a body because people back home tell me, stop them, stop them, and we have a bipartisan group of people trying to stop this, and we can’t.
“And that’s too bad, Mr. Speaker. It’s too bad that we can’t.
“And people are suffering when people back home don’t have jobs. People in this body don’t know what we’re going to do in the next month for work, but thank God we’re elected officials, and at least we won’t starve. But many of our neighbors back home don’t have that assurance. They really don’t have that assurance, and they’re begging us.
“I have a friend who started a software company, specialized software. He’s going to be taxed now, and guess what he told me? And by the way this is a very liberal Democrat, a constituent a friend of mine. He was at my house for Christmas, so I’m a bipartisan guy. But the reality is he came to me almost weeping this last weekend that this will drive him under completely. He will be done.
“Now, what’ll I tell my friend back home? What do I tell that man? The government is so important to sustain, that these programs that we’ve continued to build up and to expand ,were so important that I’m going to bury him and his business that he and his wife have struggled with for years?
“I’m afraid that’s the message we take home, Mr. Speaker. It’s a sad day for us. It’s a sad day when we think about what we’re taking from our neighbors back home. This is redistribution at its worst, and frankly we all should go home and figure out what we’re going to say to people.
“We won’t have those union guys calling us, because guess what? They’re going to get their paychecks. But the people that are working and building businesses and trying to hire people that have been laying people off, that have been cutting health care for their employees, where are we going to send them?
“There is no place we can send them. They got nothing to give. They’ve given all they can, and there’s no work.
“In December we took a group of Republicans over to see the governor, and we said let’s sit down and figure out some solutions that can take us from a positive approach, and can look at how can we create a system and environment where we will invest in communities. We will invest in creating jobs, where these guys that are banging the hallways out here will say thanks a lot, you guys, instead of saying, please help us. Thanks for giving us some tools to go out and create wealth to create jobs. This is what we should be hearing.
“Instead, we have people that represent small businesses out there and all over calling us, and saying please stop it, please stop them from doing it to us. How are we supposed to stay alive? How are you going to create jobs?
“We talked about jobs and gave it lip service. Our idea about jobs is to create some government program. There is a little bit of job creation, but it’s not the sustainable type. It’s not the type that creates long-term jobs, that creates long-term investment in our communities.
“This makes me weep, Mr. Speaker. We have time to change this, and I know in a short session here, we all want to go home, it’s Saturday morning. And we think this is the best we got. Ladies and gentlemen of the House, and Mr. Speaker, I don’t think this is the best we got. I think we can do better, and I call on you, I call on the governor and I call on the other body across the rotunda, please let’s stop for a minute and think about what’s going to happen when we go home.
“You know, a lot of us think we’ll be back here in January to fix what we’re doing right now. I don’t think we’ll make it to January. If we’re not here in September to redo what we’ve done today, I’ll be completely surprised.
“States around the country are nearing insolvency. We have a trifecta of failure that we spoke about earlier, with our Health Care Authority and them being upside down $220 million. We have a pension system that’s insolvent, and by the way, the Health Care Authority, they would be in receivership if they were a private company. This is what our insurance commissioner said. And then, of course, worker compensation.
“You know, can we look at these three examples of where we’ve been and say, are we on solid ground? I don’t think any of us can. We all worry about the future of these funds. But they are like the canary in the mineshaft. They’re going down, and I fear that we will be near insolvency as a state by September if we don’t do something else.
“At the very least, we’ll come back here maybe $3 to $5 billion upside down because we’ve been wrong in our estimations every time. We keep thinking we’re writing our budgets based on revenues, and guess what, we’re wrong every time. It’s not getting better, and what we’re doing is not going to make it better.
“I plead with you, reject this. Let’s start over. We’ll stay here for another week if we can come up with a package that really reforms government and it doesn’t hurt our constituents back home. I plead with you. Reject this.”
Too Much Faith in the Private Sector
Rep. Geoff Simpson, D-Covington: “I hear a lot of people on this floor assigning reasons that we have a budget problem. And I’ll tell you the real reason. You know, we talked about how some people here have faith. Faith in a variety of things, and one of the biggest things I hear on the floor is faith in the private sector. Just let the private sector solve the problems.
“Mr. Speaker, the reason we have a revenue shortfall is the private sector. It’s greed in the private sector. It’s people who said, you know, these are products that have some worth. These mortgages, these derivatives, their products, have some worth, why don’t you spend your money on them?
“And that’s what people did, and later the private-sector house of cards came tumbling down and threw our economy into the biggest mess that we have had since a similar thing happened in the 1930s.
“You know, people talk about the Bible. In James Chapter 2, He said, brothers and sisters, and I’m paraphrasing because it’s been a while since I went to Sunday school, Mr. Speaker, but He said, brothers and sisters, what good is faith without deeds? If you tell somebody who needs food and clothing, good luck to you, I hope you’re warm enough and get something to eat, that doesn’t do them any good.
“What good is faith without deeds? You need to go out and show people, show people that you care about whether their fed, whether they’re clothed, whether they get an education, whether they have access to healthcare. That’s what this revenue package will do.
“You know, I’m disappointed there isn’t more here. This isn’t a balanced approach. When you cut in excess of $4 billion and you raise a few hundred million dollars to close a big shortfall that is caused by the private sector and reliance on the free market, that’s not a balanced approach. There should be more.
“I’ll vote yes, and I hope in the future we’ll have a more balanced approach to close the budget gaps, than by cutting in excess of four dollars for every one dollar we raised to address that shortfall.”
Recession Creates Opportunity — Taxes Kill It
State Rep. Kevin Parker, R-Spokane: “The gentleman from the 47th [Simpson] was referring to a presidential administration that was ushered in 1992 that, joint with the [House] and the Senate, loosened the regulations that caused the problems he is speaking about.
“This is the fact. The private sector traditionally gets a flat tire when the government puts a nail in it. And we’re seeing it today. the private sector grows when there are two things. When governments pass a budget that is both sustainable and one that provides for opportunity.
“Unfortunately I cannot tell my constituents that this is a sustainable budget. It’s not just because of one-time transfers, not just because of the reliance on federal money, but Mr. Speaker, it is not sustainable because at the end of the day it’s simply not balanced.
“This morning I was calling constituents with the spare time that we’ve had, and I spoke with a woman named Mary who is a single mother, that has kids she is trying to provide for. She has a Masters in public policy, and Mary was talking about her need for a job, and how she was so worried that she has searched and searched and searched. A very talented woman, a Masters in public policy, and she is unable to find a job.
“That is why the budget is not sustainable. The budget’s not sustainable, because this budget does not provide opportunity for the Marys who are very talented, and the Marys would like to have a job but cannot find one.
“So Mr. Speaker, I rise in opposition to this. I rise because today I take a stand with the single mothers who need to find a job, and this budget encumbers that prospect. I rise for the employers that would like to hire but simply can’t, and I rise for the future employers that would like to start a small business and have historically offered us a service in times of recession, because they often lose their jobs and find that they have enough entrepreneurial spirit, and create businesses that have 1, 2, 3 or 4 employees. Sometimes they rise to become large manufacturers. But Mr. Speaker, this budget does not provide that opportunity.
“It occurs to me that this budget also lacks throughout the whole process. I have not heard incentives for small business. Sustainable revenue does not come from asking the people of Washington for more money that they don’t have to give. That sustainable revenue comes from the private sector job growth that we’ll take.
“As a result, those men and women who have lost their jobs in many cases and will stand and put their life savings on the line because they’re going to follow a dream, and they’re going to follow a hope, the hope that life can be better because people come and they follow their dreams, and they realize their dreams as their working.
“Dreams aren’t realized without jobs, and Mr. Speaker, this budget is a jobless budget.”
Government and Private Sector Both Important
State Rep. Steve Conway, D-Seattle: “I’m kind of amazed by the economics I’m hearing today on the floor, in a state that relies so fundamentally on federal spending. Those are tax dollars, and right now we’re actually waiting for a deal to be consummated in Congress that would bring tanker construction to our major employer in the state.
“Now those tankers are going to be paid by tax dollars, right? And those tax dollars are going to create a great many jobs for private employers in the state, so don’t tell me that tax dollars don’t create jobs, because tax dollars create a lot of jobs.
“Right now in Pierce County, the largest employer is Ft. Lewis with almost 50,000 employees. Those are tax dollars that pay for those, folks, so don’t tell me that tax dollars don’t create jobs. In fact, what we are trying to do with this budget is to create an investment in the people of this state and help them through this great recession.
“These dollars go for schools, for higher education, for workforce training. For crying out loud, we need a partnership between government and the private sector, and that’s what this tax package is about, creating that foundation for job growth in this state, I believe fundamentally.
“You know, I listened to the good gentleman from the 20th [Alexander] when he placed an amendment before the Ways and Means Committee. His solution to our problem, his solution was to take 76,000 folks off Basic Health. Many of those folks who are unemployed they depend on Basic Health. Is that your solution, to cut Basic Health to a 76,000 folks? That was the amendment in Ways and Means.
“No, today we do the right thing. Today we invest in the people of the state with this package, to lay the foundation for future growth and future good jobs in this state.”
A Recipe for Trouble
State Rep. David Taylor, R-Moxee: I rise in opposition to the tax proposal before us today, and I will be brief. There are a couple of main points I want to hit on first. Mr. Speaker, I want to be clear. This tax proposal will have a direct impact on agriculture in the 15th District and throughout Washington State.
“Now, I know there are colleagues here who will say Rep. Taylor is crazy, there’s nothing in here that affects agriculture, and I would have to agree. You’re right. This tax proposal does something further.
“It will tax canned goods fruits and vegetables, and for the many producers in my district that rely on those canned goods in order to make a living, they’re the ones that are going to be impacted the most, because those canning operations must stay competitive. Which means in the marketplace, their price has to be similar to the next person’s. Their only alternative is to drop their prices to growers.
“With all the other tax proposals that we have or may consider here, we’re going to drive their profit margin down. I’ve talked here before about the Main Street multiplier, and I’m not going to talk about that again, but this will impact our agricultural producers to the tune of $4.8 million.
“We heard this morning, early on and throughout the debate, about how a vote against this tax proposal is a vote against health care, it’s a vote against education, it’s a vote against kids. Well, Mr. Speaker, I would have to ask this body; really we’re going to say that?
“We’ve been here six days. That’s 48 people for the year on the Basic Health Plan. We’ve been here six days. That’s the daily cost for 178 people in prison. We’ve been here six days. That’s two teachers.
“If we step back and do what’s right, and had we done that in the beginning, we would need this. We wouldn’t even be here. Some of our members would be home plowing fields, trying to make a living. Some of our members would be back on the streets as police officers trying to make their communities safer. But we’re back here.
“…If I may read from a recipe, it’s a jelly recipe? You’ll like it.
“Start with 2 cups of Washington-grown raspberries, pureed, 2 cups of Washington finally chopped peaches, a tablespoon of lemon juice, or a quarter teaspoon of ascorbic acid, a quarter teaspoon of peptic acid, 6 cups of granulated sugar and a half teaspoon of butter.
“That recipe would fall under the new increased B & O tax. If I as a business reduced that recipe and sell at a higher profit than what is established for small business, I’m going to be subject to a higher tax.
“I’m using Washington-grown products. I’m putting people to work and yet I’m being penalized, Mr. Speaker.”
Tax Bill is a Job Saver
State Rep. Mary Lou Dickerson, D-Seattle: “I believe that the legislation before us is a true jobs saver. A job saver. And I say that because not only will it save public jobs, jobs like teachers, teachers who will have their jobs saved through levy equalization or the parts of our budget to deal with smaller class size, jobs for other public employees such as the guards in our prisons, but it also saves jobs in the private sector, Mr. Speaker.
“I know most about the jobs in the private sector that relate to human services. I know about the jobs with the senior centers that this revenue will help. I know about the jobs in the health care field, nurses, mental health professionals, and doctors, people who work with the developmentally disabled people, who provide services in the private sector to those who have chemical dependency. These are important jobs.
“These are thousands of jobs, and these are jobs that will be saved. And I stand here also very happy to support this bill, even though I think the revenue should be greater, and that’s because as the good gentleman who chairs the education committee said, it will help our children. But also, Mr. Speaker, it will help 60,000 people on the Basic Health Plan.
“I heard something else on this floor that I want to comment on. The good gentleman from the 13th [Hinkle] talked about why this wasn’t a good idea. He said we’re not asking people for the taxes, we’re making them pay the taxes in this proposal.
“Well, Mr. Speaker, I ask you to stop and think about that. Have you ever known a system where a state goes out for voluntary taxation? I don’t think that system would work.
“Finally, Mr. Speaker, I’d like to say that this piece of legislation is not just a simple way to pay for services, services that the people of this state have told us quite specifically that they want, that they need, that they have to have. It is also a moral document and it is a humane document. Therefore, I ask you to support it.”
Big Government at its Worst
State Rep. Doug Ericksen, R-Ferndale: “I rise in opposition to this bill, of course. This bill is simply a tax-increasing, job-killing celebration of big government.
“It’s a transition in Washington State from a process that was priorities of government, to government is the priority.
“And Mr. Speaker, this is big government at its worst, because that is what this bill does with these targeted tax increases. This is big government saying which jobs will be here tomorrow and which jobs won’t.
“If you’re in the airplane industry, your job’s gone. We’re going to tax you out of existence. If you’re the bottled water industry, we’re going to tax you out of existence. If you’re a candy producer, we’re going to tax you out of business.
“This is big government at its worst, Mr. Speaker. We’re picking and choosing winners and losers, deciding whose job we value and whose jobs this legislature says are expendable.
“So picture yourself sitting at home, flipping back and forth between the NCAA tournament and TVW, and you see this debate on this bill, and you’re the person that works in a candy factory, you’re the one that works in the bottled water factory, you’re the maintenance guy on that airplane over in Walla Walla. The Legislature today is taking dead aim on that individual watching the television, because of what this Legislature is doing today. The same person who is just watching St. Mary’s beat Villanova is the same person who will not have a job next week, because of what this Legislature is doing today.
“That is wrong. That’s abuse of power. That’s government run amuck. But what it is, Mr. Speaker, it is big government. We have returned to the era of big government in Washington State in this tax package.
“This targeted tax increase on jobs and families on employers in Washington State is the transition phase to a pathway to socialism. That’s the path were going down right now in Washington. We need to stop it, Mr. Speaker.
“Also, imagine you’re a small-business owner in Washington state. You just went through a gut wrenching experience trying to get insurance for your employees. When rates up, benefits went down. What does the Legislature do? They raise your taxes to expand health care benefits for state employees.
“Think about that for a second. Not only am I taxing you out of existence, I’m refusing to reform the health care system in Washington State. I’m going to take your money that could have gone to health care for your employees. We’re going to take it from you and use it to expand health care for state employees. That is big government, Mr. Speaker.
“The people who vote for the budget say state employees are more valuable than private jobs. We’re going to take your health care from you and give it to state employees. That is wrong, Mr. Speaker, that is just wrong.
“So I stand here today. I know this bill is going to pass, and the Democrats who will vote for this want to increase taxes. Many have said higher, higher, higher, but Mr. Speaker, I think the message when we talk about bipartisanship is there will be bipartisan opposition to this bill today. Republicans and Democrats will vote no but not a single Republican on this House floor will vote to increase taxes.
“Mr. Speaker, we are united in saying we can do better we must do better, and when this bubble bursts, Mr. Speaker, around this dome, and the people see what is happening, there will be serious debts to be paid to the people of Washington state, when they see the damage that is inflicted upon the employers of Washington state by the actions taken here today.
“Mr. Speaker, now is the time for us to put this bill down. Now is time to say, I value the employers of Washington state, I value those employees, I’m not going to drive your job to Oregon or Idaho. We’re going keep you here in Washington state. We’re going to kill this tax package, we’re to get back to work, and you know what, governor of Idaho, you can take your letter back, your love letter to the businesses of Washington state, because Washington state is going to stand up and make it a good place to do business, and not simply give people the roadmap to Idaho saying, move your company over there.”
A Tax Package Designed to Cripple the Tri-Cities
State Rep. Larry Haler, R-Richland: “I’ve heard a lot of talk today about private sector versus the government sector and government jobs. I come from a community that in 1943 the United States government took over for the purposes of the Manhattan Project to develop the atomic bomb, which saved millions of lives on both sides of the war, and ended the war mercifully and honestly in 1945.
“Ever since the 1940s and 1950s and the expansion that we saw at the Hanford project and all the monies that were infused in our community, we as a community have been seeking to regain the private sector. Why is it that we keep seeking to regain the private sector in our community versus the government? Because we know the private sector will provide us with good paying jobs, and good paying jobs that will last for a long time.
“Also with the private sector jobs, there is more return, as far as the dollars spent and dollars distributed back to the community. We have been successful since 1996 and 1998 in uniting all four communities within the Tri-Cities area of the state, in developing private-sector jobs. In fact, we’re so good at it that 60 percent of our economy diversified into the private sector in the Tri-Cities.
“But with this bill before us, a lot of the reliance that we have on our neighbors in Oregon coming across the border to buy goods and services from our people in our communities on a tax-free basis is going to go away. We’re now going to be taxing the very people who have come to our community to help us build and help us diversify.
“You’re also going to be taxing Con Agra, which is a big, big producer of canned goods and prepared foods in the Tri-Cities. They distribute to southeast Asia and around the world, but mainly Southeast Asia for our potatoes grown, and that gets back to agriculture.
“You are taxing with this bill, you are taxing the very basis of our new economy in the Tri-Cities, and I believe that by doing this you are chasing businesses away from my community and from other communities around the state. When John F. Kennedy was president of the United States in the early 60s, he actually cut taxes, and we actually saw growth of the national economy during the mid-to-late 1960s. Why haven’t we learned that lesson? Ronald Reagan cut taxes and we saw the growth of the economy in the 1980s. The former President of the United States, George W. Bush, cut taxes, and we saw unprecedented growth in the economy in this nation.
“If you take a look at the Washington state Employment Security Department chart that was floating around here early in the session, and I urge you all of you who have not seen it to go to their website, since January of 2008 to December 2009, we lost nearly 174,000 jobs, private-sector jobs in the state, due to our lack of priorities of our taxation policies and our regulation policies in the state. But during that time frame, because of our $8 billion [spending] increase, a 40 percent unprecedented increase in government spending we saw growth of 8,000 to 9,000 state jobs.
“I think that shows a little bit of the disproportionality that we have placed on taxation and regulation in this state.
“I heard a lot said today from the epistle of James and I think we have lost sight of what the Bible has taught us. Nowhere in the Bible does it say that the government provides. Nowhere. But in the Bible, God is reaching out to man. In the Old Testament and the New Testament, it’s about the individual. Even in Jeremiah, God says, I knew you before you were in your mother’s womb. And God reaches out to the individual.
“In James, which has been misinterpreted by several people on this floor today, Mr. Speaker, let me give you a summation of what James has said, and I will read from the second chapter of the 26th verse, if I have your permission?
“As a body without the Holy Spirit is dead, so faith without deeds is dead.
“Mr. Speaker, I close with that. It is the individual and not government that counts, and we’ve got that reversed in this state.”Your support matters.
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