Lawmakers modify tax plan

Demand mounts for public vote on 9-cent gas tax increase

BRAD SHANNON, THE OLYMPIAN

OLYMPIA -- Lawmakers and Gov. Gary Locke, under pressure from interest groups, agreed Thursday to shrink the size of some tax increases proposed in their still-emerging $8.8 billion transportation-tax plan.

"It's not just the car dealers and the truckers. The people aren't happy with the gas tax either," said House Transportation Committee Co-Chairwoman Maryann Mitchell, R-Federal Way, one of the architects of the tax package aimed at easing congestion mainly in central Puget Sound.

The statewide tax package is meant to fit with a regional plan letting voters in King, Pierce and Snohomish counties tax themselves additionally for 40 percent of the cost of big-ticket projects such as widening Interstate 405 or replacing the Alaskan Way viaduct in Seattle.

By midevening, Locke and auto dealers agreed to cut the proposed tax on new and used car sales from 2 percent to 1.5 percent.

They also agreed with trucking interests to reduce the size of the weight-fee increase from 25 percent to 20 percent, said House Transportation Committee Co-Chairwoman Ruth Fisher, D-Tacoma.

Lawmakers also agreed to spread their proposed increase of 9 cents a gallon in the gas and diesel tax over three years rather than two increments, Fisher said.

"It's not falling apart," Senate Transportation Committee Chairwoman Mary Margaret Haugen said of the delicate legislative tax agreement. "It's just being manipulated. ... It's being refined."

Still, there was growing concern about the chances of passing a package as Sunday's self-imposed deadline for action grows nearer. Sen. Don Benton, R-Vancouver, said the chances are only "50-50" that a tax package will come out of the Legislature this year.

A big question stirring the legislative pot is whether the whole tax package will be enacted in Olympia, or whether lawmakers will send the issue to voters as a referendum.

Many lawmakers, like Rep. Kathy Haigh, D-Shelton, and Rep. Brian Hatfield, D-Raymond, said they now think any tax plan needs to be sent to voters.

"The people I heard from said absolutely, send it to the people," Haigh said Thursday evening before House Democrats were briefed on the transportation tax plan. She said calls and e-mails from her constituents included a few in support of a tax boost, but many opposed.

The governor reiterated Thursday that he wants lawmakers to do the job.

Locke, who pledged a public vote during his re-election campaign last year, changed his mind in May, saying he feared the state's economic health was at risk if a solution was not reached soon.

"I think it's important that legislators step up," Locke said. "... It's what we were elected to do."

Sen. Tim Sheldon, D-Potlatch, said he's ready to offer amendments requiring a referendum or public vote on any transportation tax package that comes to the Senate floor.

Benton said the prospect of putting a tax increase into place without voter approval "is a major stumbling block in our caucus."

House Democratic Co-Speaker Frank Chopp said his caucus has 25 votes for the tax package, but he doesn't know if he can get more to cover House Republicans, if the GOP can't get 25 as well.

The earliest a vote could come is late today or Saturday -- "or maybe not at all," Chopp said.

Brad Shannon is political editor for The Olympian.

What's in the Legislature's tax package now

Here are details of a still-changing $8.85 billion transportation funding agreement tentatively agreed to by Gov. Gary Locke and legislative negotiators:

- Gas taxes: An increase of 9 cents per gallon in taxes on motor vehicle fuels would be phased in over three years, with 3 cents added to the current rate of 23 cents a gallon rate next Jan. 1 and another 3 cents in each of 2003 and 2004. That would bring the total tax to 32 cents per gallon, raising roughly $2.7 billion over 10 years. A motorist using 10 gallons of gas per week would pay $46.80 per year extra.

- Car purchases: A 1.5 percent sales tax surcharge would be assessed on purchases of new or used car sales. The increases would be phased in over two years, with 1 percent on Jan. 1 and a half-percent the next year. An earlier 2 percent proposal would have raised $1.7 billion over 10 years. A 1.5 percent surcharge would add $300 to the existing sales tax of about $1,600 on a $20,000 vehicle.

- Trucks and recreational vehicles: A 20 percent increase in the gross-weight fee would be imposed for heavy trucks and recreational vehicles. An earlier 25 percent increase would have raised $360 million over 10 years.

- Diesel fuel: A surcharge of 3 cents per gallon would be imposed on diesel fuel, on top of the 9-cent boost for all motor vehicle fuels. It would raise $175 million over 10 years.

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