State House Democrats released a proposed supplemental budget on Tuesday that may or may not raise taxes at the state level, but it gives broad authority to city and county governments to raise taxes — even without a vote of the people.

“I think we already give the voters a say,” said House Ways and Means Chairman Ross Hunter (D-Medina). “Every four years they have an election to pick new city councilmen or county commissioners. I think we ought to be able to trust them to do what’s best for their community.”

The proposal gives local governments more authority to raise revenue via sales taxes, restaurant taxes and/or utility taxes while also allowing large counties to impose a 0.1 percent sales tax and small counties to impose a 0.2 percent increase without voter approval.

It does not — for now — impose the half-cent statewide sales tax favored by Gov. Christine Gregoire as a way to “buy back” spending reductions needed to fill a $1.5 billion revenue shortfall the state is currently facing.

“The exercise in front of us was to create a budget that balances,” Hunter said. “Once that’s done, we’ll see if it’s so bad we have to consider other options. We haven’t made that decision yet.”

Among other considerations, a sales tax increase would have to be approved by the voters.

“And I’m not certain it would pass,” Hunter said. “Then you’d be right back where you started.”

House Republicans released their budget package on Friday, and Hunter said his version was “pretty different.

Under a budget proposal unveiled on Tuesday by House Democrats, local governments would be betting less support from the state but would have broader powers to raise their own taxes to fund local projects.

“It’s a starting point for both of us,” he said. “Now we have to decide what it would take to get a little closer.”

Regarding the reduction in funding to local governments, Hunter said the Legislature has little choice.

“Over time, local governments have punted their responsibilities up to the state,” he said. “We can’t afford to help anymore. The state has to decide what its core function are and fund those first.”

Hunter said the state needs to focus on funding basic education, healthcare and other state responsibilities, and “something has to give.”

Hunter said the Supreme Court decision in January that ruled the state is not fulfilling its duty to fund basic K-12 education required a “big rework” of the budget.

Unlike the Republican proposal, which seeks to balance the budget through spending cuts and increased efficiency, the House Democratic package is largely dependent on a one-time accounting gimmick of delaying the reporting of $405 million worth of education payments within the 2012-13 school year.

A portion of the June 2013 apportionment payment to districts is moved to July 2013 (the first month of the next biennium). Similarly, the May and June 2013 levy equalization payments are delayed to July 2013.

“You make a set of choices in a budget,” Hunter said of the technique. “This is a shift that also in the governor’s budget in largely the same form. We understand exactly how it works. There’s no risk in it and we don’t think there’s any impact to local governments.

“Would I prefer not to do it?” he asked. “Absolutely. But I think we’re OK. It’s the right set of choices.”

The Democratic budget also incorporates  two new sources of revenue, including  $13 million from a plan that would add certification and taxing requirements to roll-your-own, or RYO, cigarettes and the retailers that provide these machines.

The second revenue source comes from $18 million in mortgage business and occupation tax  exemptions.

The budget also includes a reduction in human services by eliminating some chemical dependency services, Hunter said.

There will be no early releases from prison, but there will be “supervision changes” in the corrections department.

“Budgets we’ve passed in recent years have had a negative impact on low-income residents,” said Rep. Jeannie Darneille, D-Tacoma. “We’re trying to save programs that make sense, but over time we’ll have to measure what the outcome is for this budget.”

Hunter said last week he would not offer a budget proposal that lacked the votes for passage on the floor, but on Tuesday he backed away from promising approval for the current version of the bill.

“I think we can get this budget passed,” he said. “I believe it has the votes to get out of committee. After that, we’ll see. But I think we can get it through more or less intact.”

The budget details can be viewed here.

This entry was posted on February 21, 2012 at 6:44 pm and is filed under Budget & Taxes, Economy, Education, Elections, Politics. You can follow any responses to this entry through the RSS 2.0 feed.