Conservative senator floats tax hike for state budget fix

By DAVID AMMONS The Associated Press
10/23/01 5:50 PM

OLYMPIA (AP) -- One of the Legislature's most conservative Democrats is floating the idea of a temporary sales tax increase to help ease the
state's potential billion-dollar budget shortfall.

State Sen.  Jim Hargrove, D-Hoquiam, has never voted for a state tax
increase in his long legislative career, but he is quietly promoting a
two-year "Freedom Premium" that would boost the sales tax by perhaps
three-tenth of a penny on the dollar.

The state sales tax is 6.5 percent, although local governments and transit
districts drive the total to over 8 percent in many locales.

Gov.  Gary Locke's budget office is girding for a billion-dollar budget
shortage due to Boeing layoffs, reduced consumer spending and a general
cooling of the state economy following the events of Sept.  11.

Locke said in an interview that he intends to solve the problem through
spending cuts.  Taxes are not on the table, he said.  Key legislators have
taken the same no-new-taxes approach, with varying degrees of firmness.

Hargrove became the first lawmaker to publicly discuss taxes as part of the
budget fix this winter.

In an interview with The Associated Press, he conceded the chances of
approving a tax increase are iffy at best, but said lawmakers and the
governor need to put everything on the table in addressing the state's
budget needs.

Hargrove said it's ironic that he would be the first legislator to bring up
the possibility of taxes: "I haven't voted for a tax increase in my 17
years in Olympia."

But he said a big share of the state's budget shortage, perhaps $600
million to $700 million, can be attributed directly to the terrorist
attacks.  Congress is moving with haste, in bipartisan fashion, to address
the needs of New York City and Washington, D.C., and is approving billions for the airline industry and others affected by the terrorists, he said.

Hargrove, chairman of the Senate Human Services and Corrections Committee, said deep cuts in state services would hurt the state's most vulnerable
citizens.

Locke has directed six large state agencies, including the Department of
Social and Health Services, to come up with proposals for cutting their
budgets by 15 percent in the upcoming fiscal year.  The DSHS cut would be
$474 million; the total target amount for all six agencies would be $577
million.

Other agencies are asked to identify ways to cut their budgets, although no
targets were handed down.

"Potentially, we are re-terrorizing people all over again, people like
senior citizens and abused kids," Hargrove said.  "In general, I think we
ought to live within our means.  But this is different.  In times of war,
the government has sold war bonds and tapped the public to support what's
going on."

Citizens responded generously to the terrorist attacks, giving blood and
sending millions of dollars to the victims' families and charitable groups,
he said.  A temporary sales tax would be in the same spirit, protecting
vulnerable people from cutbacks that wouldn't have been necessary had the
attacks not occurred, he said.

"I see this as a patriotic response, rather than some tax-and-spend
agenda," he said.  "We've had an attack within the boundaries of our
country and this has had a tremendous impact.  We just need to pull together."

Hargrove said his plan would raise about $300 million a year, but wouldn't
fully solve the problem.

"We obviously have to make some cuts," he said.

Hargrove conceded "it may not be in the cards" to drum up enough bipartisan support for his plan.

Still, some lawmakers and spokesmen for labor and anti-poverty groups
welcomed his proposal.

"It makes sense to create as many options as possible before taking them
off the table," said Senate budget Chairwoman Lisa Brown, D-Spokane.
Majority Senate Democrats will talk about the budget mess, and Hargrove's
plan, at a retreat next month, she said.

"I appreciate people coming up with suggestions, even if they may be out of
the realm of possibility," Brown said.

"It's hard to keep taxes off the table, even though I think that is the
last, last resort," said Senate Majority Leader Sid Snyder, D-Long
Beach.  "I'm certainly not advocating it at this time."

The co-chairmen of the House Appropriations Committee, Republican Barry Sehlin and Democrat Helen Sommers, said taxes almost certainly won't be part of the solution.  Sehlin said a number of fee increases and other
non-general tax increases will be proposed, though.

"I'm very, very nervous about any kind of tax increase, particularly with
how the voters are responding with (tax-cut) initiatives," said Sen.  Don
Carlson, R-Vancouver, a moderate who sometimes votes with the Democrats on fiscal matters.

"We do have a crisis and Jim Hargrove understands the dilemma we face in a number of areas, including services for the developmentally disabled.  I
don't rule it out, but I am very hesitant."

In accordance with Title 17 U.S.C. Section 107, any copyrighted work in this message is distributed under fair use without profit or payment for non-profit research and educational purposes only. [Ref. http://www.law.cornell.edu/uscode/17/107.shtml]