Temporary Or Permanent? What Will The Taxes End Up Being?

Aren't WA Democrats Just Deadlocked Over Making New Tax Increases Permanent?
(Creative minds go so many places. This can be fantasy, fact or fallacy. We will know in a few days.PR)

Why is it that the majority party in WA State is still locked in budget negotiations in this ongoing special session?

While the general debate has been thought to be about the details of what taxes to raise and in what proportions, that may not be where the debate is settling. The train could be held up over whether or not to make these taxes permanent.

The House reportedly already has the votes to do this. And, the House wouldn't be “going there” if the governor hasn't already signaled her willingness to sign permanency. The Senate is only a few votes short of having the votes to once again break confidence with voters.

All session the Democrats have been talking “sun-setted” tax increases. Each tax bill already voted on has contained an expiration date. But, behind closed doors the further concern may be next year, the '11-'12 budget cycle. Likely to still be in the majority, how will they balance their budget then? Should they just move forward now with permanent taxes and take their lumps at the polls or should they just plan to increase taxes again next year and get through this election cycle as best as possible?

Then there is reality for the majority. Faced with the expected passage of I-1033 (the restoration of the 2/3 vote requirement to raise taxes) there won't be an opportunity to extend taxes next year. They have to permanently raise the taxes this year or plan to cut services and government jobs next year.

The governor recently stated that she will not call another special session. If the legislature does not finish up she will just cut government 20% across the board. She is threatening her majority now with what they will surely face later if they do not instate permanent taxes this year. This puts significant pressure on the legislature to take the plunge. If they don't, their own political base will punish them for not securing funding for the next budget cycle.

For Democrats, the dilemma is whether or not they will lose more members by enacting a permanent tax now or by cutting services and state jobs prior to the '12 election cycle. In any event, they want a higher and more steady tax flow to take them clear through the recession and beyond.

Yet they also want to be able to save Democratic incumbents in both the '10 and '12 elections. Who will make it through the '10 elections? How many surplus Democrat votes will they have left in the upcoming sessions? I suspect the tax debate has become very personal within the vaulted doors. That's a given.

The squeeze is on. The likelihood is that there will be permanent increases imposed. Democrats will suffer maybe just another loss or two but be better positioned in next year's difficult budget cycle when they will likely be restrained by down revenue and a 2/3 vote requirement.

After the repeal of the Taxpayer Protection Act ( I-960), the no go attempt at a state income tax, and the passage of many “temporary” tax increases, we are likely to have even more silence before the unveiling of this new permanent taxing plan. For the majority Democrats, backlash is feeling more like whiplash.