‘This is a blatant attempt by the majority party to pass the buck to local governments and get around taxpayer protections continually approved by voters’ says Rep. Paul Harris

Democrats in the state House of Representatives introduced legislation this week that would give local governments new authority to raise taxes and fees.  Opponents of the measure say this is an effort to buy-back the funding reductions to local municipalities that were contained in the House Democrat budget, allowing state budget writers to “pass the buck” onto local governments to pay for critical services.

Rep. Paul Harris, R-Vancouver, called the proposal an “end-run” around the voter-approved two-thirds legislative vote requirement to raise taxes at the state level.  He also said it would devastate small businesses and lead to more lay-offs and job loses.

“This is a blatant attempt by the majority party to pass the buck to local governments,” Harris said.  “The House Democrat budget cuts services to local governments – mostly in the area of public safety – but then tells them to go ahead and raise taxes at the local level to buy-back these services.  It’s an ‘end-run’ around the taxpayer protections that have been approved by voters time and time again.”

Harris recently met with local residents Kevin Knutson and Kim Meadors, both small business owners in the restaurant industry who said any tax increases would result in job losses for workers and higher costs to customers.

“Our state and local economies are extremely fragile right now,” Harris said.  “Tax and fee increases, especially on small, family-run businesses like restaurants and taverns, will bring further harm to many employers who are just starting to see some possible light at the end of the tunnel.”

The House Democrat proposal, House Bill 2801, authorizes the following new locally imposed taxes:

• 0.1 percent sales/use tax for King, Pierce, Snohomish, Clark, Thurston, Kitsap and Spokane Counties.  ($86.4 million tax increase)

• 50 percent of the tax is kept by the county and the remaining 50 percent is distributed on a per capita basis to cities within the county.
• Allows a city within the above named counties to impose the tax if a county does not impose the tax by January 1, 2013.
• 0.2 percent sales/use tax for all other counties. ($56.1 million tax increase)

• 80 percent of the tax is kept by the county and the remaining 20 percent is distributed on a per capita basis to cities within the county.
• Allows a city to impose the tax if a county does not impose the tax by January 1, 2013.
• 0.5 percent sales tax on restaurants, bars, and taverns.
• 6 percent utility tax for counties.  Revenue must be used for public safety, infrastructure, capital projects, and other services.

The bill also:

• Removes the voter approval requirement for the 0.1 percent sales/use tax for construction and operation of juvenile jails.

• Removes the public vote requirement to impose the 0.3 percent county sales/use tax and the 0.1 percent city sales/use tax for public safety.  Six counties (Jefferson, Kittitas, Spokane, Walla Walla, Whatcom and Yakima) currently impose the tax. 

• Extends flexibility to use the 0.1 percent mental health sales/use tax to counties with a population over 25,000 or cities in King and Pierce Counties for current operations for the first five years of imposition. 

• Expands collection of permit fees to include “proportionate staffing, administrative, and facility costs associated with the processing of applications.”

• Authorizes cities to charge transaction fees for accepting payments by credit card, charge card, debit card, or other electronic transactions.

Harris called the extensive tax proposal unnecessary, saying the state’s budget issues shouldn’t be pushed onto local governments and citizens.

“The House Democrat budget still fails to address the fundamental budget problem,” said Harris.  “We’re expecting almost two-billion dollars more in state revenue this biennium compared to the last two-year budget cycle.  This is an increase of almost seven percent.  Revenue isn’t the problem.  Bringing state spending – which ballooned to unsustainable levels when the construction industry was booming – back into line with state revenue projections is the real issue.

“If the House Democrats would expend as much energy on passing legislation to help create jobs and get folks working again as they did on trying to find ways to surreptitiously raise taxes, we’d all be better off,” Harris said.

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