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As the state scrambles to patch an exploding budget lawmakers are throwing around the dreaded 'I'� word

Things are getting wild as Washington lawmakers scramble to patch up the monstrous (and seemingly ever-growing) hole in the state budget. Last week, both the House and Senate released their plans for keeping the state’s checkbook balanced over the next two years. It wasn’t pretty. The former pitched cutting $683 million from higher education. The latter proposed slashing $877 million from K-12 schools. Both took ravenous bites out of health care, corrections and natural resources.

“Words are inadequate to describe the havoc this will wreak,” said WSU president Elson Floyd in a prepared statement shortly after the House budget was released.

The situation’s gotten so bad that Senate Democrats are cautiously throwing out the dreaded “I” word.

That’s right: an income tax.

Lisa Brown, Spokane’s Senate Majority Leader, started a shit-storm last week when she mused on her blog that maybe the state should finally heed the recommendations of a 2002 study that said Washington’s current sales and property tax structure was unreliable and unfair to the poor, and that the state would be better served by a personal income tax.

“The New York Legislature is considering what I think is a fair and stable way of addressing their revenue challenges,” she wrote, linking to a New York Times story from Albany, where lawmakers have decided to temporarily raise income taxes on the state’s highest earners.

Brown’s suggestion was a little waffle-y. The response has been anything but, with near-instant calls for her head.

“Can we recall Brown?” asked a commenter on the Spokesman-Review’s Website. “She really seems to want to do nothing but take more money from us.”

Brown says she’s convinced that Washingtonians understand the current tax system is unfair, but do they really understand what an income tax is, or how it would work here?

Forthwith, some of the most frequently asked questions we’ve heard on the subject this week:

What the hell is going on here?
Nothing yet. While Sen. Jeanne Kohl-Welles (D-Seattle) this week proposed levying a 1 percent income tax on people making $500,000 or more, it’s unclear whether it will go anywhere. Kohl-Welles has unsuccessfully proposed similar bills before, Gov. Gregoire has come out against this one, and Brown says the new bill was coincidental to general talks among Senate Democrats about long-term fixes for the state’s current crunch. Brown says she thinks something like the high-earners income tax might work (among other things), but she isn’t offering any specifics yet.

Would we get to vote on an income tax?
Brown indicated in a press conference last week that the Legislature would likely send any income tax proposal to the voters as a referendum in November. Considering the governor’s chilly no-new-taxes stance, the idea might get a better hearing from the public anyway. 

If we don’t vote until November, would this even make a dent on the budget shortfall?
Nope. An income tax wouldn’t go to voters until November and then it would take a while for revenue to start pouring in if it passed. The nastiness of the current proposed budgets will likely linger.

Have we tried an income tax before?
Washington voters approved an income tax by initiative in 1932 but it was ruled unconstitutional. Since then, they’ve voted pretty squarely against it several times.

So is a high-earners’ tax constitutional or not?
Hard to say. Brown thinks so, but UW law professor Hugh Spitzer says it will come down to the state Supreme Court’s 1933 ruling about whether income is considered personal property. (It’s constitutional elsewhere — Washington is one of only seven states that doesn’t use an income tax.)

Are they still talking about raising our sales taxes, too?
It looks like that idea has gone by the wayside as discussions of an income tax have heated up. “Sending out a sales-tax package right now, I think, is losing steam,” says Seattle Senator Ed Murray.

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