Support The Wire

Inslee Says He’s Still Against New Taxes – Old Ones Are Something Else

Says He’s Willing to Consider Extending ‘Temporary Taxes’ From 2010 – Now Open to Transportation Package This Year

Jay Inslee fields questions at his first press conference as governor.

Jay Inslee fields questions at his first press conference as governor.

OLYMPIA, Jan. 18.—Gov. Jay Inslee, addressing reporters at his first news conference since he took the oath of office Wednesday, said that no-new-tax campaign promise contained a mighty important qualifying word – he’s against new taxes, but old ones are a different thing entirely.

Inslee said he’s willing to consider extending a pair of “temporary” taxes from 2010 that are set to expire this June, a 50-cent-a-gallon beer tax and a business and occupations tax surcharge on service businesses – doctors, lawyers, accountants and others. Together those two taxes would generate $634 million over the next two years.

“I have not made that decision yet,” he said. “But should the Legislature reach that conclusion and eventually agree with that, what I’m going to do is to tell the truth that these do not increase taxes. They do not raise taxes on people beyond the existing level that in fact is being paid today. And since they do not increase taxes, they are not a tax increase.”

And so the first flap of the Inslee era begins, as Republicans accuse him of backpedaling on a campaign vow. But another Inslee comment presented a clearer reversal, and this one may cheer both business and labor: Inslee now says he is open to a transportation package this year. During the campaign he said he was opposed to any move to increase gas taxes in 2013.

‘Temporary Means Temporary’

Inslee’s comments Thursday offered a signal to the Legislature that his tough anti-tax talk during the campaign didn’t mean quite what people thought it did. This year lawmakers have a billion-dollar-or-more problem on their hands as they try to find money to pay for a Supreme Court decision that requires the state to beef up spending for K-12 schools. The $634 million in revenue could get them quite a distance toward the goal, but lawmakers say they are being lobbied heavily to allow those taxes to expire. And already the leaders of the new Senate coalition majority say the idea isn’t even worth considering.

“Our first priority has been to help the governor keep his pledge, and we believe that temporary really means temporary,” said Senate Republican Leader Mark Schoesler, R-Ritzville. “For the public to have confidence in what we do as elected officials, we have to keep our word. When I talk to my local accountant, my attorney, my barber, my CPA – they all talk about how it was a temporary tax. Those professional people that are paying that extra B&O are huge contributors to every one of our communities. They are the ones at church, in Little League – they are the pillars of our community, and they are the ones that are being punished. We need to keep our word on that B&O tax.”

Talk of extending the taxes seems to come from the department of how-soon-they-forget. Back in 2010, when tax revenue tanked in the recession, legislative Democrats sparked huge uproar when they suspended Initiative 960, one of a series of measures that aims to make tax increases harder by requiring a two-thirds vote of the House and Senate. They then passed a tax package that imposed nearly $1 billion in new taxes that year – some of them permanent, some of them temporary. The fact that eventually they would expire was a major selling point. Then-Senate Majority Leader Lisa Brown described it as an emergency situation, declaring at one point on the Senate floor “the vast majority of it is temporary increases in revenue” – while cynics guffawed and predicted  someday there would be a move to make the taxes permanent.

And now the cynics may be proven right. For legislative purposes, a vote to reimpose an old tax is the same thing as a new tax. But Inslee said it is completely different. “Since they do not increase taxes, they are not a tax increase,” Inslee said. “That is a numerical mathematical conclusion that Huskies and Cougars, no matter where you went to school, can agree with on a mathematical basis.”

May be Transportation’s Year

Inslee faces the press in the conference room at the state Capitol.

Inslee faces the press in the conference room at the state Capitol.

While Inslee’s tack on temporary taxes arguably might not be a complete about-face, his signal on transportation clearly was. And yet the odds are he won’t face major criticism on that score. During debates last fall Inslee dismayed business and labor organizations when he declared that he would not support a transportation package for 2013 – perhaps in 2014. Transportation interests have spent years working to build support for a multi-billion-dollar increase in gas taxes and other transportation-related taxes, and Inslee’s stand during the campaign left them assuming they might have to ask the Legislature to bypass the governor and send a tax increase to the ballot.

Now Inslee says he is willing to consider transportation taxes in 2013. He noted that House Transportation Chair Judy Clibborn is attempting to build support for a tax-increase proposal with key constituent groups. “We are going to try,” he said. “I’m going to talk to Republicans and Democrats as early as possible about their ideas,” he said. “I have been in discussions with leader Clibborn just a few days ago. She has got a fairly well-developed proposal that she will be talking to others about, and I will be talking to Republicans, obviously, about this, too. We are going to make every effort. It is a challenge as it always is. All of these ideas now that embrace investment while we are still in a difficult economic climate – it is tough, it is tougher now than at other times. But time is wasting. The economy needs this boost, so I will be pushing it as much as I can.”

The ‘Climate Governor’

Inslee, reinforcing his greenest-governor image, did much to tout upcoming plans for environmental policy – without venturing too deeply into the realm of specifics. “You will get them,” he promised. “And you will enjoy them. And you will find some of them brilliant, some of them common sense, and some you may have questions about.”

He said they’ll be part of his upcoming jobs proposals, to be unveiled sometime soon. About the only hints he offered were that they would provide new financing mechanisms for energy-efficiency improvements for homeowners and clean-energy purchases by business. And he put in a plug for Initiative 937, the controversial 2006 ballot measure that is requiring utilities to purchase an increasing percentage of power from wind and other sources – even if they don’t need the juice. “Our state is probably the cleanest state in the United States when it comes to our electrical usage, because we are both blessed with hydroelectric power and we have been wise enough to have a renewable portfolio standard that has moved forward a lot of our wind power and other things.”

Walks Tightrope on Coal

But Inslee didn’t provide a clear answer on perhaps the hottest-burning environmental issue in the state – whether to permit construction of coal ports to enable the shipping of coal to China. Environmental interests are dead-set opposed but on this one Inslee risks antagonizing his constituency in labor. Inslee walked the tightrope. He observed that “when we burn any fossil fuel product, carbon dioxide goes into the atmosphere around the planet and eventually is dissolved into the waters of Puget Sound and off our coast line, and when that happens that dissolved carbon dioxide creates acid, and there is no scientific dispute about this.” Yet he stopped short of advocating that environmental impact statements assess global impact of China’s coal use – and said merely that Washington ought to consider the impact of coal trains on local communities.

“I will say, from what I know, this is the largest decision we’ll be making as a state from a carbon-pollution standpoint, certainly during my lifetime and nothing even comes close to it. So I have got to give some thought to this.”

Your support matters.

Public service journalism is important today as ever. If you get something from our coverage, please consider making a donation to support our work. Thanks for reading our stuff.