Photo by Visitor7/Wikimedia

Photo by Visitor7/Wikimedia

Vetoed tax cut for manufacturers again pushed in bipartisan effort

Bill would lower business and occupation tax by 40 percent over four years.

Legislators are once again pushing for an across-the-board manufacturing tax cut that was vetoed during the previous legislative session by Gov. Jay Inslee.

The bill, which is sponsored by four Republicans and two Democrats, would lower the manufacturing business and occupation tax rate by 40 percent over four years, according to proponents. The reduced rate would be equal to that paid by Boeing and other aerospace companies as a result of a roughly $9 billion tax cut that was approved in 2013 with bipartisan support and the governor’s signature.

The legislation is identical to a manufacturing tax cut that was approved by both Democrats and Republicans—it passed the Senate by 33-16 and the House by 83-10—during last year’s contentious budget negotiations. Gov. Inslee used his line-item veto power to scrap the tax cut, arguing that it was agreed to quickly and without public scrutiny.

Primary bill sponsor Sen. Michael Baumgartner, R-Spokane, and other Republicans contend that last year Inslee agreed to the tax cut but suddenly reversed his position and vetoed it without warning.

“Inslee went back on the agreement to include the bill and did a double cross and lied and vetoed the bill,” said Baumgartner. “Regardless of Jay Inslee being a liar, it was part of the bipartisan budget agreement and it’s good policy.”

“I think there’s still that level of support for it on both sides of the isle,” said Sen. John Braun, R–Centralia, a lead GOP budget negotiator during last year’s session.

He added that the governor is now in an “awkward position” because of his veto of a bipartisan bill and that “he did not do himself any favors and cast a cloud over this legislation.”

Inslee has gone on record in the past saying that neither he nor any of his staff ever agreed to the tax cut, and that it was passed without adequate public scrutiny and input.

“These tax reductions should be considered in a thoughtful, transparent process that incorporates public input and business accountability,” he said in his veto letter last year.

Jaime Smith, an Inslee spokesperson, wrote in an email that the Governor’s Office hasn’t reviewed Baumgartner’s proposal yet.

Twenty-three Democratic House representatives last summer co-signed a letter to the Governor imploring him to veto the tax cut several days before he killed it.

Despite such dissent last year, the tax cut still has bipartisan support.

“I was pushing to have that as part of the budget deal last year. So I was just as frustrated as the other side of the isle when it got vetoed,” said Sen. Mark Mullet, D-Issaquah, a co-sponsor of the bill.

Deputy Senate Majority Leader Andy Billig, D-Spokane, said any potential manufacturing tax cut should have provisions in it that require manufacturers to produce jobs in Washington state, similar to requirements in the Boeing taxcut, that lets the tax cut expire if certain products aren’t produced in the state.

“I’m not against doing it. I’m saying, if we’re going to do it, and say ‘we’re doing it because we need to be equal to what Boeing is doing,’ then we should make it equal to what Boeing is doing and have some accountability provisions,” Billig said. “We’ve got some differing opinions in our caucus but I think the prevailing opinion is that if we’re going to do tax exemptions, they have to have accountability.”

He added that it’s too soon to tell if the bill has legs.

Sen. David Frockt, D-Seattle, said the general notion of reducing taxes for manufacturing has support in the Senate Democratic caucus.

“My colleagues and I would like to have a lower manufacturing rate,” Frockt said.

This report was produced by the Olympia bureau of the Washington Newspaper Publishers Association.

[flipp]

More in Northwest

Fire along Twisp River Road in the Okanogan Wenatchee National Forest in 2018. Courtesy photo
Wildfire response: State unveils funding legislation proposal

Last year, Department of Natural Resources responded to record number of wildfires.

A new report, complete with recommendations to the Legislature, has been released by a statewide task force that was formed to address a lack of child care in Washington. File photo
Report outlines lack of child care in Washington

In King County, supply doesn’t meet demand for child care.

Demonstrators from La Resistencia protest Amazon’s involvement with ICE. Photo courtesy of La Resistencia
How will the U.S. respond to climate refugees?

Business as usual has been harder borders, are there other ways to address climate migration?

A young girl holds up a ‘Don’t Pollute I Live Here’ sign in the crowd during the Youth Climate Strike at Cal Anderson Park on Friday, March 15, 2019 in Seattle, Wash. (Olivia Vanni / The Herald)
King County builds blueprint for health, climate change

The plan will inform how the Board of Health addresses climate change-related health issues.

File photo of a pothole
King County approves roads, bridges funding

The capital projects funding is significantly less than previous years.

Safe drug consumption sites have been recommended by the King County Heroin and Opioid Task Force. Pictured is a safe consumption site in Lethbridge, Alberta, Canada. Photo supplied by ARCHES in Lethbridge
What’s been happening with safe injection sites?

There hasn’t been much coverage this year compared to the last couple years.

A “notice to vacate” sign was placed in the middle of a homeless encampment in Federal Way by FWPD officers before the encampment was cleaned in January 2019. Sound Publishing file photo
King County, Seattle could create joint homelessness response agency

It would be a unified agency and the overarching authority on addressing homelessness in the county.

Flying Fish: Lake Sammamish kokanee move to Orcas Island

It’s part of a program to preserve the unique freshwater salmon species.

Malena Gaces, left, and other members of Washington CAN protest unfair move-out charges and alleged discriminatory behavior outside Kitts Corner Apartments in Federal Way in 2018. Sound Publishing file photo
King County could increase tenant protections

The council is considering ordinances designed to help renters.

Most Read