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Category: Taxes


Rep. Carlyle says he wants lawmakers to hold ‘courageous’ discussion of tax breaks in new Finance Committee

House Democrats reconstituted a revenue committee this year, breaking the House Ways and Means Committee in half – leaving House Finance and House Appropriations. Rep. Reuven Carlyle, a Seattle Democrat, is chairing the Finance operation and says he wants to set the table for a broader discussion of the tax system and how special favors in the tax code could be repealed if they are not producing a clear public benefit.

With the Senate caught in turmoil and narrowly led by an anti-tax coalition of 23 Republicans and two Democrats, Carlyle knows the change for any big tax changes may be slim. He says he first wants the House to help find ways to pay for the nearly $1.3 billion or $1.4 billion that some lawmakers think is needed to answer the Supreme Court’s ruling about underfunded K-12 schools.

“The House wants to be thought leaders in terms of helping to design a responsible budget and funding it,” Carlyle said in an interview last week, noting that the Senate goes first on the budget this year. “Funding the budget is job one. Job 2 is to put ‘McCleary’ (the court’s K-12 school funding challenge) on the table. … We defined basic education and we have to fund it.’’

The third piece of Carlyle’s agenda is a more systematic and longer-term look at tax breaks in the code, which are worth billions of dollars a year (some are popular, like the one exempting food and prescription drugs from the sales tax; others that let high-tech companies get credits for research-and-development spending are less so).

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Wash. delegation splits on ‘cliff’ vote; GOP yes, Smith and McDermott lone Democrats against

U.S. Rep. Jaime Herrera Beutler of Camas was among the 85 Republicans who voted last night to pass the so-called fiscal-cliff bill, saying it falls short of fixing budget problems but was needed to avert income tax hikes on individuals earning less than $400,000 a year.

In Washington state’s delegation, only Democratic Reps. Adam Smith of Bellevue Jim McDermott of Seattle and voted against the deal that avoids hundreds of billions of dollars in tax increases and automatic spending cuts but increases deficits by $4.5 trillion over a decade. The vote roll call is here.

Herrera Beutler put out a statement explaining her action, which mirrored that of the other Washington Republicans. Reps. Dave Reichert of Auburn, Cathy McMorris Rodgers of Spokane and Doc Hastings of Pasco also voted in favor. Read more »


Washington state Supreme Court says that diversion of gas tax money from off-road-vehicle facilities to state parks was constitutional

A divided Washington state Supreme Court Thursday ruled that a 2009 diversion of gas tax proceeds from off-road-vehicle recreation accounts to the Washington State Parks and Recreation Commission did not violate state constitutional restrictions on the use of the gas tax.

The case in the Washington Off-Highway Vehicle Alliance v. State of Washington

Three justices agreed with a state court of appeals decision that the recession-era diversion that softened pending cuts to the parks department was a legitimate use of gas tax revenue. Two other justices agreed with the outcome but thought the court should have dismissed the lawsuit

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Washington state Revenue Forecast Council votes to hire new director and chief economist Steve Lerch

The state Economic and Revenue Forecast Council agreed unanimously this afternoon to hire acting director Steve Lerch to serve as permanent leader of the Washington state agency that provides estimates of state government revenues to policy writers. The move comes after candidate interviews that appeared to violate the open meetings laws.

Lerch has served in the job since January, replacing Arun Raha, who went back to the private sector. It was the second time Lerch filled in on an interim basis.

A blog post last week shows that last week’s announcement by council chairman Ed Orcutt- which in effect

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UPDATE: State Forecast Council either has hired or will hire a new director just as soon as it can have a public meeting

The press release from the state Office of the Economic and Revenue Forecast Council today announces that the acting director is the new director.

Steve Lerch has been filling since the state’s top economist, Arun Raha, returned to the private sector in January. Lerch was on loan from the Washington State Investment Board and led the council staff through the last two quarterly forecasts.

This was his second stint as an interim director, serving the same role before Raha was hired in 2008. He has a doctoral degree in economics from Johns Hopkins University and has worked for a series of state agencies, the private sector and for the U.S. Congress.

New chief economist Steve Lerch

“New Forecast Council Executive Director Announced,” was the headline on the press release.

“Dr. Lerch has the right mix of education, training, and experience regarding the economy and forecasting as well as an ability to effectively communicate technical information to a broad audience whose expertise lies in areas other than in economics and forecasting,” said state Rep Ed Orcutt, a Kalama Republican and the current chairman of the council.

But Lerch hasn’t been hired and won’t be until the seven-member council meets next Thursday. So how can he be considered the new chief economist?

The press release says he was considered by the council Wednesday and “after deliberation the Council agreed that Dr. Lerch has the experience that Washington State needs for our unique revenue forecasting process.”

I asked a staff member how that happened, since there doesn’t appear to have been any public notice of a council meeting. She replied that “interviews were conducted on Wednesday, August 29th in executive session; five members agreed on the selection informally.They will formally put forth the motion and approve at our public meeting on September 6th.”

But the forecast council, made up of four legislators as well as the governor’s revenue director, budget director and now the state treasurer is supposed to follow the Open Public Meetings Act. And it has done so since being formed in 1984 to professionalize and take some of the politics out of the official forecast of revenue.

But I couldn’t find any meeting notice for August 29 either in e-mails from the council staff or on its website. And while the law does allow the council to go into closed session to consider candidates for a job, it cannot make decisions or even deliberate in secret. All that is supposed to be done in public. It can’t even deliberate and vote in private and then do it again in public and still abide by the law.

So where and when was the deliberation conducted. And where and when did five council members agree that Lerch was the best for the job?

Orcutt said five council members conducted interviews with Lerch and two other finalists Wednesday and called the decision tentative.

“It’s what people seem to feel,” he said. “We’ll formalize that and have the discussion in public.”

“It’s not totally official until we vote Thursday,” he said.

Marty Brown, the governor’s budget director, said he assumed the meeting had been posted but now sees that it was not. But he said no vote was taken and that members only gave their impressions of the three finalists. While Orcutt could have assumed from the comments that Lerch had enough support.

“It was obvious from the group that were we to vote, it would have been Steve (Lerch),” Brown said. “We left saying we still need to think about it and will vote Thursday,” Brown said.

“I was surprised at the press release,” Brown said. As to the failure to post the meeting, Brown said, “We should be better than that.”

Here is the press release sent today… Read more »


Judge tosses Eyman lawsuit over I-1185 costs in voter pamphlet

Tim Eyman tried his hand as a lawyer in court today and pretty much lost his shorts. A Thurston County judge threw out Eyman’s claim that the Office of Financial Management needs to change its estimate of taxpayer costs for Initiative 1185 in the voters pamphlet.

I-1185 – which seeks to reassert a two-thirds legislative vote requirement for tax hikes and a simple majority vote requirement for all fee increases – is one of a half-dozen measures on the ballot Nov. 6. Superior Court Judge James Dixon ruled that OFM has discretion under the law and

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Tacoma: City won’t seek ballot measure to fix streets, pot holes

A big dip in the latest property tax assessments has spurred City of Tacoma officials to back off a plan for a ballot measure this fall that would have asked voters to raise property taxes to fix the city’s pothole-riddled streets.

City Manager T.C. Broadnax announced Wednesday he has recommended against the proposed levy lid lift, which had sought to raise property taxes by 50 cents per $1,000 of assessed value to raise a projected $9 million per year for six years.

The measure was one of several recommendations made by a citizens’ task force formed last  year to examine

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Tax on roll-your-own cigarettes survives

The companies suing to halt the Legislature’s new tax on “roll-your-own” cigarettes have thrown in the towel.

Both sides agreed to have the lawsuit dismissed, which the Franklin County Superior Court and state Supreme Court did July 3. It might be another nail in the coffin for stores whose machines sell discount, tax-free cigarettes.

The decision appears to be tied to a new law passed by Congress placing the stores under federal regulation. President Barack Obama signed the law Friday, which could make the stores’ operation so difficult that they will close even without the new state tax that treats roll-your-own

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