The Washington state House Democrats – with the blessing of their Senate counterparts – want to close four tax breaks in order to raise money for education upgrades mandated by the Supreme Court’s McCleary decision. The bill, authored by Rep.Reuven Carlyle, D-Seattle and chairman of the House Finance Committee, had its hearing Friday.
The bill would close an extracted fuel tax break, 98 percent of which is used by five oil refineries; force out-of-state residents pay Washington's sales tax; create a sales tax on bottled water and eliminate a B&O tax for drug resellers. Altogether the tax breaks would raise $106 million in 2014-2015 and $203 million in 2015-2017 to finance education improvements and cost-of-living increases for teachers.
Democrats have proposed closing these four exemptions for years, always to be defeated by the Republican legislators.
Though few people actually testified Friday, a rash of written support came for the bill from numerous education and labor interests, while business interests wrote in to oppose it.
Among those who did show up to testify in person was Greg Hanon of the Western States Petroleum Association, who disputed that the 1949 fuel tax exemption was intended for "hog fuel."
On the other side of the fence, Nick Federici of the Our Economic Future coalition argued that the state has to find new revenue to pay for the education upgrades required by the Supreme Court and that the tax breaks are as good a way to do it as any.
"Now, this is literally the most profitable industry in the world," he said of the oil industry.
And he didn’t stop there. "If you don't want to pay a water tax, then get it from the spigot."
