Bill requires audits of state tax breaks; House approves legislation

The House of Representatives approved a bill Monday that would put more than 400 state tax breaks - some dating back to the 1930s - under the microscope through regular audits.

"We have fallen in the eyes of the public in terms of their view and their confidence in the state tax system," said Rep. Jim McIntire, D-Seattle, the bill's primary sponsor.

"This is just a modest step toward restoring public confidence in the fairness and the accuracy in our state's tax system."

Backers said regular auditing of tax breaks will keep the state competitive with tax incentives by eliminating those that are outdated and making way for newer ones, which will make the system more efficient and help create jobs.

Prioritizing exemptions, they say, will get rid of "loopholes that give money to large corporations" and will make government more accountable to taxpayers for exemptions they called "hidden government spending."

House bill 1069 calls for periodic reviews of tax exemptions, exclusions, deductions, deferrals, credits and preferential rates, which are known as tax preferences.

The Judiciary Legislative Budget Committee would conduct the reviews for each tax preference and recommend whether to eliminate, modify or maintain the tax preference.

"This is a long-overdue piece of legislation," McIntire.

"It is developed with the actual intent in reviewing those tax preferences that are the most productive so that we can make our tax system more productive and produce more jobs, therefore producing more revenue for the state."

The mostly Republican opposition argued that the bill would accomplish the opposite, making the state unattractive to businesses.

Businesses could move away if their tax breaks were taken away, said opponents.

"If you're going to put every one of these under the microscope every couple of years you're going to have businesses thinking, 'Why should I stay?' " said Rep. John Ahern, R-Spokane.While Democrats claim the bill would help the economy by bringing jobs into the state, Rep. Ed Orcutt, R- Kalama, labeled it a "loss to the economy."

"This bill is for jobs," said Rep. Mike Armstrong, R-Wenatchee.

"It's for jobs in Idaho and Oregon, and I'm for jobs in Washington."

Ahern gave examples of businesses that chose to relocate to other states, including Alaska Airlines and Buck Knives Co., which was considering moving to the Spokane Valley but instead chose Post Falls.

"It's pretty much an anti-business bill," he said.

"The title sounds great, but it creates a lot of uncertainty for businesses moving here."

Despite the objections from Orcutt and others, the bill passed by a vote of 63-32. Another accountability-related bill was also passed earlier in the day.

That bill, HB 1276, would require the governor to sign all significant rules passed by state agencies.

SIDEBAR:INSIDEMORE LEGISLATIVE NEWS -- Proposals in the House and Senate call for Washington to join California and several other states in stricter emission standards on cars, starting in 2009. The onus would be on auto manufacturers to produce the cars, not on individual car owners to bring their current vehicles up to snuff. All new cars and light trucks in the state would need to comply with the standards by 2016. -- House Bill 1397 and Senate Bill 5397 would follow California's policy, which is more stringent than the 1990 federal emissions standards. New cars would have to emit 30 percent less carbon dioxide, 20 percent fewer toxic pollutants and up to 20 percent fewer smog-causing pollutants than the established federal standards. See story, B6

Travis Hay can be reached at (360) 586-0002 or travis.hay@gmail.com.

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