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GHS students take part in legislative pilot project
Four Goldendale High School students and a faculty member visited Olympia last week to participate in a pilot program aimed at giving 15th District teens an introductory look at the legislative process. The project was initiated by Rep. David Taylor in conjunction with the Goldendale School District.
“Rather than study the Legislature from afar, the idea is to provide young people an opportunity to see first-hand the procedures of proposing legislation, differences between the House and Senate, and the role of private citizens in developing public policy,” Taylor, a Republican from Moxee, says.
The students chosen for the project’s initial phase were juniors Mikaylee Balcom and Jesse Duff, and seniors Shawna Quantrell and Adrian Sanchez. Principal Clay Henry selected the four on the basis of their leadership and academic achievement. They were accompanied by Doyle Payne, a Goldendale High School history teacher.
Taylor said the Goldendale School District was selected to initiate the program because of its central location in the 15th District.
“Field trips are costly and difficult to arrange,” Taylor says, “and with schools having to tighten their belts, the first phase of the project was designed to bring only four students to the Capitol this year. If the program is successful, and if students and teachers think it’s worthwhile, we would look toward expanding it to include more participants in 2011.”
During their time in Olympia, the students observed floor sessions and committee meetings, sat in on public hearings and met with legislators and staff. They also were featured in Taylor’s Legislative Update, a biweekly video report which airs on Toppenish and Yakima stations. The video can also be viewed at Taylor’s legislative Web site,
http://www.houserepublicans.wa.gov/Taylor.
“My hope is that they gained a little clearer understanding of the procedural and political complexities that comprise the law-making process,” Taylor says. “It’s important that we look for fresh opportunities to further youth interest in government, public service and civic participation.”
State businesses upset over proposed loophole closures in legislature
State legislators have finally rolled out their plan to close tax loopholes, and the howling from business can be heard from the state capitol to Walla Walla.
Democrats have introduced legislation aimed at raising $350 million by ending special tax breaks for business, as part of a plan to extricate the state from its budget hole now estimated at $2.8 billion. House Bill 3176 eliminates 14 tax exemptions granted to business by state law.
But a packed hearing on the proposal Saturday in the state House demonstrated that they will face stiff opposition from some of the state’s largest businesses and lobbying organizations. Among other things, the proposed bill would:
• Impose a tax on trucks and trains carrying goods between Washington ports and points east.
• End sales-tax exemptions for residents of Oregon, Montana, and Alaska—states with no sales tax—who do their shopping in this state.
• Dramatically increase taxes on private aircraft.
• Give the state Department of Revenue authority to reject what it sees as business tax dodges.
The loophole attack is a central element in the budget-writing strategy of the majority Democrats in the state Legislature this year. The state offers some $3.2 billion in tax breaks to business, usually with some sort of economic goal in mind. But every dollar lawmakers can save this year by closing a loophole is a dollar that won’t have to be raised in taxes. That idea has appeal to lawmakers who have to find some way to close this year’s gap. “I think the Legislature ought to reserve the right over time to look at tax exemptions that made sense for economic development at the time they were passed,” said House Finance Chairman Ross Hunter, D-Medina.
But lawmakers were reminded Saturday that one person’s loophole is another’s vital economic-development tool. Business interests came to the hearing in force—some 300 people signed up to testify on the loophole bill alone. They argued that ending tax exemptions is just another way to raise taxes, and they said the plan would stifle economic recovery at a time when the state needs it the most.
Most of the proposals, safe to say, are ones that haven’t gotten much attention so far—but they’ll bring out a full-court press of lobbyists in the final weeks of the 2010 legislative session.
Most attention has gone to a single proposal, a plan to end a Supreme Court decision last year that handed the state a $154 million bill. The decision in the Dot Foods case, prompted by a lawsuit from an Illinois food wholesaler, applies to all out-of-state wholesalers doing business in Washington through “sellers’ representatives.” The court ruled that the state had implemented an obscure tax break too narrowly. The state can’t avoid paying $59 million in refunds. But if the state ends the exemption by July 1, it can avoid losing another $95 million in tax revenue over the next year.
That may be the only idea in the bill that enjoys clear bipartisan support. Democrats and Republicans have been talking about closing the loophole since last fall.
But even that isn’t simple. There was a reason for the original tax break, which aimed to reduce the burden on salespeople for organizations like Mary Kay Cosmetics. Mark Johnson, speaking for the Direct Sellers’ Association, urged lawmakers to retain the original idea, which would cost only a few millions.
“This will cost jobs, B & O and sales tax,” he said. “There are over 388,000 direct sellers in the state of Washington, 355,000 of which are women. They are trying to make ends meet by selling things part-time and making a little extra income in these tough economic times.” He said lawmakers certainly can find a way to take the break away from Dot, but leave it for Mary Kay.
The proposed changes would have big implications for any business that manages its affairs so as to pay as little tax as possible. The state Department of Revenue would be allowed to disregard transactions in which the only goal is to avoid state taxation. More ominously, as far as business interests are concerned, the state Department of Revenue would be allowed to decide which businesses are trying to evade taxation.
The general aviation industry, hard-hit by the recession, would be hit with a 1,400 percent tax increase, lawmakers were told. The plan replaces a special aircraft excise tax with a tax based on aircraft value, to generate $6.3 million. That’s one more nail in the coffin of private-plane ownership and the charter-flight business, said aviation representatives. Already many planes have been grounded because of the economic downturn, and if Washington raises taxes, many operators may just move their planes out of state.
“The real punchline today is jobs,” said John Dobson of the Washington Pilots Association. “The state has lost 35 percent of its revenue derived from aviation. Our projections indicate that this excise tax will not add any revenue. In fact, this will cost another 15 percent, and that means fewer aircraft and fewer aviation-related jobs in the state.”
Other key elements of the loophole proposal would raise business and occupations taxes for gold-coin and bullion dealers, and require banks to pay real estate excise taxes when foreclosing on property. Curiously, one of the biggest proposals received no testimony at all at Saturday’s hearing. That would extend the state B&O tax to a larger number of out-of-state companies doing business in Washington, raising $73 million.
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