Washington State Lawmakers Impose $768 Million in Fee and Tax Increases in 2008

More than $200 billion in fee and tax increases proposed

by Jason Mercier, Director, Center for Government Reform, Washington Policy Cente


Introduction

The cost of government is going up this year. During the 2008 Legislative Session, lawmakers imposed $768 million in fee and tax increases over a ten-year period. Home inspections, background checks, fingerprinting, floral services and state tuition are among those activities that will cost more as a result.

Last November voters enacted Initiative 960, The Taxpayer Protection Act. Under Initiative 960, the legislature is required to approve all agency fee increases before they can take effect. Also among the new law’s provisions is a requirement for the Office of Financial Management (OFM) to determine the ten-year cost to taxpayers of any proposed tax or fee increase and to make this information publicly available, along with the contact information of the legislator sponsoring the increase.

According to Initiative 960’s intent section for this requirement (Section 2 in-part):

“The people want a thorough, independent analysis of any proposed increase in taxes and fees . . . [and] a user-friendly method to track the progress of bills increasing taxes and fees, finding that transparency and openness leads to more public involvement and better understanding.”

As a result of this requirement, OFM conducted fiscal reviews of all bills that proposed tax and fee increases and reported the ten-year impact in the fiscal notes for those bills. OFM also created a self-subscription service for email updates on any bill that proposed tax or fee increases.


2008 Tax and Fee Proposals

During the 2008 Legislative Session, state senators proposed 46 bills (including companion bills) that would increase state taxes or fees. The initial versions of these proposals sought to raise $215.4 billion in revenue over a ten-year period. Of these proposals, the legislature adopted five, raising $13 million in fees or taxes.


State representatives proposed 36 bills (including companion bills) that initially sought to raise $98.8 billion in fees or taxes over a ten-year period. The legislature ultimately adopted nine of these bills, raising $755 million in fees or taxes.


In total the legislature enacted 14 bills raising fees and taxes by $768 million over a ten-year period.



Conclusion

Since the 2008 Legislative Session was the first one conducted under the requirements of Initiative 960, it is difficult to determine if the number of tax and fee increase proposals introduced and adopted this year is the norm. To help determine any trends in tax and fee increase proposals in the future, Washington Policy Center will update this report after each session and keep a running total of all bills that fall under the requirements of Initiative 960.

As a general rule, however, all tax and fee increases should have an expiration date (sunset). When tax and fee increases are set to expire, lawmakers will have the opportunity to look at the facts and determine if the tax and fee is serving its intended purpose. If revenue from the tax or fee is still justified, lawmakers can reauthorize it for a period of time. If the project or goal for which the tax or fee was imposed has been accomplished, citizens should be permitted to keep their money.