OLYMPIA — Health care interests are starting their campaign for a state sales tax increase, sponsoring a TV advertisement this week to pump up public support for a November referendum bankrolling health programs.
The new flurry of political maneuvering comes with less than three weeks remaining in the 2009 legislative session, which has been dominated by efforts to bridge a $9 billion state budget shortfall through mid-2011.
State lawmakers are proposing about $4 billion in spending cuts to help make up the gap, with cuts to most areas of state government. But Washington hospitals and community clinics, along with nurses and health services labor unions, are hoping to soften the blow of budget cuts by asking voters for a temporary sales tax boost.
Plans for such a referendum have been evolving all year. But clearer details have emerged this week, just as the interest groups put a new political ad on TV in hopes of generating more voter support.
The possible referendum being discussed at the Capitol would be a temporary, statewide sales tax increase of either 0.3 or 0.4 percent, said Cassie Sauer, a spokeswoman for the Washington State Hospital Association.
Such an increase would bump the state sales tax rate to either 6.8 or 6.9 percent. Local taxes are levied on top of that rate; in the most expensive areas of King County, the total tax on general sales presently is 9.5 percent.
The state Department of Revenue estimates that a 0.3 percent increase in the state sales tax could raise about $644 million during the next two-year budget cycle. A tax hike of 0.4 percent would raise about $858 million over the same period.
That much money could "buy back" some state health care spending that is slated for cutbacks, keeping hospitals and other health care providers paid at some level and helping them avoid layoffs, Sauer said.
For instance, the Legislature's proposed budgets would cut about $250 million by freezing enrollment in the Basic Health Plan, which provides subsidized health insurance for poorer people. The budget proposals also would cut the rates hospitals are paid to care for people without sufficient private insurance, saving about $150 million over two years.
As presently envisioned, a referendum from the Legislature would raise the sales tax for two or three years, to help health care groups get through the current recession.
The money could be tied to specific programs, such as the Basic Health Plan and others, Sauer said. A vote would be in November, giving the interest groups backing the plan enough time to finance and mount a serious campaign.
Democrats, particularly in the Senate, also are likely to insist that any sales tax increase also come with a credit for people of modest means, to ease the regressiveness of such a tax hike.
The key now is what voters say they might support.
"We'd want to be assured that the people would potentially pass such a tax increase," said House Majority Leader Lynn Kessler, D-Hoquiam. "There's no sense sending out something, and trying to spend a lot of energy on it, if it doesn't have a chance to pass."
Interest groups have been polling and conducting focus groups throughout the legislative session to determine whether voters have any willingness to raise taxes. The coalition started out larger, but several labor groups, including the Washington State Labor Council and the Washington Education Association, have dropped out.
That leaves the health advocates, including the Hospital Association, Community Health Networks of Washington, three locals of the Service Employees International Union, the state Nurses Association and others.
Sauer said voter research has shown that the public isn't yet sure what the Legislature might cut — and what that means.
"People don't have any sense of what the cuts are, and also don't have any sense that they'll be affected by them," she said. The new TV ads are meant to change that perception, with more polling planned after they run for about a week.
If a sales tax referendum does emerge, it will be a high-pressure race to the end of the session.
Top Democratic lawmakers also have endorsed two more possibilities for the November ballot: A state income tax for people making more than $250,000, or a $3 billion bond package to finance public works projects.
Health advocates would want the ballot to themselves, of course. But time is running out.
"We don't know what direction we're going, and we wouldn't know what we're buying back," said Sen. Rodney Tom, D-Medina, the No. 2 Democrat on the Senate budget committee. "It's very conceptual. We only have 18 days left in this session."
Posted in News on Thursday, April 9, 2009 12:00 am Updated: 9:51 am.
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