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Orcutt says bill to review
tax incentives will
cause concern among employers
The House of
Representatives today sent a mixed signal about its desire to improve
Washington’s business climate, passing one bill that would likely put
tax incentives at risk and another that might protect employers from
overbearing government agencies, said
Rep. Ed Orcutt,
R-Kalama.
“Employers want certainty,
not risk. If they’re here or thinking of moving here because a tax
incentive has made Washington a competitive place to do business, House
Bill 1069 may make them think twice,” said Orcutt. “It’s being
advertised as a ‘good-government bill.’ Unfortunately, it makes
taxpayers account for how they spend money they don’t owe in taxes. I
doubt it will be viewed by employers as a hand reaching out – it’s more
like a hand pushing them away, toward Oregon.”
In contrast, said Orcutt, House Bill 1276 is a true accountability
measure that would require the governor to sign significant new agency
rules, a step that might make state agencies think twice about the rules
they place on employers and citizens. The bill has long been on the list
of measures Orcutt believes will reduce the cost of doing business in
Washington, and help employers to become more competitive.
“The majority party says
it is serious about revving up Washington’s economy, but it didn’t prove
that today,” said Orcutt.
HB 1069 would require tax incentives to be reviewed by a government
commission that would regularly recommend whether to repeal them.
Approved last week by the House Finance Committee, it would create a
seven-person panel to make annual recommendations about whether the
Legislature should continue, modify or terminate tax preferences
contained in state law.
Three of the panel’s five
voting members would be appointed by the political party of the
governor, and two would be appointed by the other political party. The
bill also would order that a report on tax preferences expiring between
this July and 2007 be delivered in time for the 2006 session.
“We already have two
panels in the Legislature to review tax incentives. One is the House
Finance Committee, on which I am the lead Republican member. The second
is the Senate Ways and Means Committee,” Orcutt said. “The bill would
cost $760,000 we don’t have for a process we don’t need. And why a
partisan, appointed commission, when your elected representatives make
the final decisions anyway?
“I’m concerned that the
intent of this commission is found in testimony we heard in committee,
from the groups who said tax incentives need to be reviewed because they
want more money from the state. Eliminating tax incentives would put
more money into the general fund for those groups to pursue, but at what
price to the economy?” asked Orcutt. “I can’t think of any sector of our
economy where we can afford to lose employers.”
As ranking Republican on
the Finance Committee, Orcutt led the debate opposing the bill. He also
offered four amendments that would have brought HB 1069 closer to being
acceptable. Two were accepted: one would prohibit the commission from
reviewing the small business and occupation tax credit, sales and use
tax exemptions for food and prescription drugs, property tax relief for
retired persons, or property tax valuations based on current use. The
other would prevent the panel from reviewing tax exemptions for
machinery and equipment for manufacturing, research and development, or
testing.
The House adopted a
version of HB 1069 in 2003 and 2004, but it died in the
Republican-controlled Senate. With Democrats now running the Senate, the
measure stands a better chance, said Orcutt.
A true accountability
measure, HB 1276 would require the governor’s signature on any
substantive rule that would subject violators to a penalty or sanction,
affects the standing of licenses or permits, or adopts a new policy or
regulatory program. The signature requirement would apply to rules
proposed by agencies under the direct authority of the governor, and not
those with separately elected directors.
“This would be real
government accountability, unlike the other measure adopted today,” said
Orcutt, who co-sponsored HB 1276. “We’ve tried for years to make this
law, but we meet resistance from the governor’s office, even though this
would signal a real change in the regulatory climate of our state. If
the new governor is serious about creating jobs, this is a good place to
start.”
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For more information, contact:
Brendon Wold, Public
Information Officer: (360) 786-7698
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