Washington Lawmakers Mull Extension of ‘Temporary’ Stadium Taxes

Washington Lawmakers Mull Extension of ‘Temporary’ Stadium Taxes
April 12, 2011

Jason Mercier

Jason Mercier is director of the Center for Government Reform for the Washington Policy Center. (read full bio)

Washington State lawmakers are about to prove the adage that there is no such thing as a temporary tax. They are on the verge of reauthorizing several taxes scheduled to expire next year.

Rep. Tina Orwall (D-Des Moines) introduced HB 1997 to remove the expiration date on several ‘temporary’ taxes imposed by the Legislature in 1995 to build the Seattle Mariners’ baseball stadium. The legislature approved these taxes despite voter rejection of a ballot measure to provide public funding for the stadium. At the time, lawmakers promised the taxes would be temporary.

Despite this promise, the House in March passed HB 1997 by a vote of 55-42. The bill is awaiting Senate action.

Rep. Orwall defended her bid to continue the taxes: “This is exactly what King County needs right now to prompt a faster recovery. It makes sense to invest in construction and infrastructure, support an environment where the arts and culture flourish and prosper, and develop the hospitality and service sectors to bring more tourists to Washington state.”

Hitting Hotels, Restaurants, Rental Cars
Other supporters also argued the tax extensions would help the local and state economies by creating jobs and promoting prosperity. The taxes—mainly on hotel rooms, restaurant meals, and rental cars—fund items such as the Safeco Field baseball stadium, arts and culture organizations, and a convention center.

The bill would fund expansion of the state convention center and continued arts support. Backers of the bill say employment statewide would rise by about 4,500 construction jobs and 3,000 permanent jobs, and tourism would also rise.
 
Shane Skinner of Enterprise Car Rental testified against the bill.

Tax Hits Local Residents
“In 1995,” Skinner said, “the voters turned down funding for the stadium. When the Legislature adopted these taxes, they promised the taxes would expire when the stadium was paid off. Sixty percent of the car rental tax is imposed on local people. These are low-income people, small businesses, and nonprofits. The total tax on rental cars is now 19.2 percent.

“Our customers need a break,” he added. “Please allow the rental car tax to expire.”

Despite the purported benefit to King County and the City of Seattle by reenacting the temporary taxes, a local newspaper is hoping lawmakers will reject the proposal.

‘Lawmakers Do Not Remember or Respect’
In an editorial urging lawmakers to keep their tax promises, the Seattle Times wrote: “Lawmakers either do not remember or do not respect what King County taxpayers were told. . . . The legislation breaks a vow with people paying the taxes who were told in plain English that the taxes would go away when the stadium was paid for. This is no time to be assigning that money to the next pending desire. Pass the smelling salts. Lawmakers need to snap to their senses and allow the taxes to expire, as promised.”

The Seattle Times further reported, “A Bellevue reader, Robert Sheehan, called this week to say he’s put his legislators on notice—if they don’t allow the stadium taxes to expire as promised, he’ll ‘never vote for any tax increase again.’ And he’s not reflexively anti-tax: Sheehan says he voted in favor of keeping that bottled water tax last fall. He’s not alone—Sheehan’s comments are right in line with what many are telling lawmakers about the stadium taxes.”

Governor Hasn’t Announced Position
In response to a query for this article, Gov. Christine Gregoire’s staff said the governor has not taken a position on the proposal and so could not say whether she would keep the promise made to voters 16 years ago and veto the bill if it arrives on her desk.

“Lawmakers in Olympia often wonder why people don’t trust them. The politicians scratch their heads when voters place tight restrictions on their ability to raise taxes,” said Paul Guppy, vice president for research at the Seattle-based Washington Policy Center. “The public’s mistrust is not so surprising when we find out that the only thing temporary about the stadium taxes is lawmakers’ promise to let them expire.”

Poll Shows Strong Opposition
An Elway Research poll released March 30 reported, "By a margin of 57% to 37%, the 405 Seattle voters interviewed for The Elway Poll last week said the taxes should be repealed rather than extending the taxes for these other purposes. Of course, Seattle voters did not want these taxes in the first place—they voted against a stadium financing package in 1995.”

The report added, “These findings cannot be dismissed as general anti-tax sentiment. In this same survey, 66% said they were in favor of extending their own property taxes to pay for the Families and Education Levy."

Jason Mercier (jmercier@washingtonpolicy.org) is director of the Center for Government Reform at the Washington Policy Center.

Jason Mercier

Jason Mercier is director of the Center for Government Reform for the Washington Policy Center. (read full bio)