House Democrats tweak highway plan

General sales tax could help finance more mass transit

DAVID AMMONS, THE ASSOCIATED PRESS

Originally published Tuesday, February 26, 2002

OLYMPIA -- House Democrats are considering a general sales tax increase to beef up mass transit in Washington as they work to build support for their multibillion-dollar highway plan.

The tweaked plan surfaced Monday as Democrats reopened transportation negotiations to try to head off ballot-box opposition from three formidable groups -- minority Republicans, car dealers and mass-transit advocates.

Democrats sent signals that they're willing to accept some GOP demands, such as opening carpool lanes on weekends. They also plan to lower a proposed sales tax surcharge for new and used cars and try to find more mass transit money in the $5.6 billion plan.

The original House Democrats' proposal, released last week, called for a 4-cent increase in the gasoline tax in October and another 4 cents one year later. The current rate is 23 cents. The plan also included a two-step 0.8 percent sales tax surcharge on new and used cars and a 20 percent surcharge on gross-weight fees for commercial trucks.

Increase on ballot

To lower the proposed surcharge on cars and to pump more money into nonhighway transportation programs, lawmakers are looking at a general sales tax increase, said Transportation Chairwoman Ruth Fisher, D-Tacoma.

The amount has not been fixed and the idea is still in the talking stage, said Majority Leader Lynn Kessler, D-Hoquiam.

"It's a brand new thought, just a concept right now," she said.

The sales tax increase proposal would go on the ballot, along with the gas-tax increase, sales tax surcharge on cars and trucking fees, Kessler said.

Kessler conceded that some lawmakers might also be eyeing the sales tax as a way to balance the general budget, which is $1.6 billion out of balance after the Sept. 11 attacks and a slowdown in the economy.

Some legislators have floated a sales tax increase with proceeds split between the operating and transportation budgets, but Kessler said that's highly unlikely to happen.

Kessler said she personally would prefer raising more revenue from gambling rather than turning to a sales tax increase, but that the Senate is resisting any major increase in gambling.

The current state sales tax is 6.5 percent. With local add-ons, the rate is more than 8 percent in most places.

Fisher said it's tough to look at the regressive sales tax as a source of funding for either the operating or transportation budgets, but that the options are limited.

Lining up support

The Democratic-controlled House Transportation Committee abruptly called off plans to shepherd the tax plan and construction project list through committee Monday and through the full House on Wednesday. By waiting until Wednesday and Friday, respectively, Democrats hope to bring more supporters on board, said Speaker Frank Chopp, D-Seattle.

"It's better to go the extra mile to get a bipartisan agreement," Chopp said at a news conference.

Chopp said Democrats will try to accept car dealers' counterproposal of a 0.5 percent sales tax surcharge and will look for ways to boost the mass-transit share of the revenue package. Opposition from either the car dealers or mass transit supporters could sink the public vote proposed for June 20, he said.

The basic tax package gives mass transit, including rail and passenger-only ferries, about 10 percent of the revenue, she said. Chopp, also counting carpool lanes and other items as transit-friendly spending, gets the number up to 21 percent. But he, too, said, "We'll see how we can bolster that part of the package."

Chopp, Kessler and Fisher all said the Democrats are trying to close the gap with minority Republicans as well.

"We're only $100 million apart," Kessler said. "We're very, very close."

The Olympian Copyright 2002

back to Taxes 2002 index