Education Jay Inslee Rodney Tom Taxation Tim Eyman Washington State Politics

Transportation Funding: It Gets Worse

It seems odds to look back at the 2005 legislative session, my first as a House member, as a pinnacle of progressivism.  After all, it was eight years ago.  George W. Bush was President.

Yet consider: In 2003, legislative Democrats were routed by their own governor, Gary Locke, and a one-session Senate budget chair named Dino Rossi, in adoption of the 2003-05 biennial budget.  Senate Republicans were artful in exploiting what I call “Gohomeitis” – it seems no principle on earth will stand in the way of adjournment.  On June 5, 2003, the wait was over, and the 58th state legislature passed its budget in special session.

Having been burned so badly in 2003, Democrats in 2005—with restive new members and new Governor Chris Gregoire – moved forward on taxes.

That session, the last state transportation tax package passed. It was high drama. After passing the Senate by the narrowest of margins, 26-22, it failed in its first House floor vote. After an emotional caucus debate, the “Dime Package”—which actually increased gas taxes by 9.5 cents for three years—passed 54-43.

In November, voters sustained the package – rejecting Initiative 912, the talk show-inspired initiative (it was sponsored by John Carlson) that would have repealed the tax, by a 55 percent margin.

Also in 2005, Democrats needed to reinstate an estate tax that was effectively repealed by the Washington Supreme Court during the session.

The measure to reinstate the estate tax passed on a strictly party-line vote: 25-24 in the Senate, with all Republicans, plus nominal Democrat Tim Sheldon (D-35), opposed, and 50-48 in the House – with then-Republican Sen. Rodney Tom (who switched to the Democratic Party in 2006 but subsequently took the helm of the Republican-dominated Majority Coalition Caucus) among the opponents.

The restored tax was dedicated to education.  When opponents filed Initiative 920 to repeal it in 2006 to repeal it, 62 percent of Sheldon’s constituents, and 57 percent of Tom’s far more affluent suburban constituents, sided with Democrats in keeping the progressive tax.

The votes on Initiative 912 in 2005 and Initiative 920 in 2006 showed voters could agree with a bold legislature. No new taxes were raised until 2010. Despite the repeal of the candy and pop taxes that fall (through Initiative 1107), it is worth noting the bulk of taxes raised that session were never challenged—including a surcharge on the business and occupation tax for professional services, raising it from 1.5 percent to 1.8 percent of gross receipts. To put that figure into perspective, this tax was as high as 2.5% in the 1990s.  Fatefully, however, this surcharge, and a beer tax, was set to “sunset” this year.

This session has brought with it renewed interest in taxes.  The economic and public safety necessity of improving transportation funding was highlighted by the collapse of an I-5 bridge section into the Skagit River. And the Supreme Court has ruled that K-12 education is unconstitutionally underfunded, after years of recession-driven cuts.

Yet it is, at best, unclear that a Republican Senate will even allow transportation funding to move forward. At least a few Clark County Republicans appear to hope the vital I-5 crossing between Oregon and Washington collapses into the Columbia River.

On operating budget taxes, Democrats are now fighting a rearguard action.  Because the 2010 taxes expire July 1, simply maintaining them appears untenable.  After the sunset comes budgetary night.  And now, amazingly, the estate tax voters affirmed so overwhelmingly in 2006 is jeopardized.  Due to the October 2012 Washington Supreme Court Bracken decision, which involves complicated pre-2005 estate tax machinations, the state stands to lose money unless the Legislature acts.  The Republican senate is seizing the opportunity to cut a deal for wealthy estates.

I am not faulting the Democrats involved in current budget negotiations. I cannot understand all that they’re facing. The Senate situation seems especially impossible. Yet I do think we can look to the past to aspire to better things for the future.  Not only can we do better, we have  to.  Surely 2005 was not as good as it gets.

Originally published at Publicola

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