The California Manufacturers and Technology Association (CMTA), the state manufacturing and technology association counterpart to the Association of Washington Business (AWB) formed a coalition to deal with new taxes and fees.
During the last California budget crisis CMTA and CalTAX, that state’s counterpart to the Washington Research Council, came together to fight the imposition of new taxes on businesses disguised as fees to fill the budget gap. The "Stop Hidden Taxes" coalition consists of a diverse group of businesses and played a key role in thwarting tax-like fees.Under California law as laid out by the Supreme Court in the "Sinclair Paint" case, a simple majority vote fee can be imposed where there is a reasonable nexus connecting the fee payer and the purpose for which the fee is dedicated. If there is no nexus, the fee is actually a tax and must have two-thirds vote of the legislature to pass.
In tough budget times legislators tend to pass fees to replace declining tax revenues. We saw that happen in 1993 when business taxes and fees increased by over a billion dollars. Those tax and fee hikes led to the passage of I-601 which tied state spending growth to population and growth in personal income.
With I-601 rendered impotent over the last few years, voters passed I-960 which reassert I-601’s provision requiring that state tax increases be adopted with a two-thirds vote in the Legislature, require legislative approval for all fee increases and non-binding public advisory votes on tax increases not approved by voters, and provide voters with a detailed cost analysis of all proposed tax and fee increases.
Sen. Lisa Brown (D-Spokane) has asked Washington’s Supreme Court to toss out I-960.If the court strikes down I-960 legislators only need a simply majority vote to raise taxes and fees and taxpayers fear that with a slumping economy, lawmakers may raise both to balance the 2009-11 budget next year.
Finally, in Washington, AWB, the Washington Roundtable and the Washington Research Council formed the Washington Alliance for a Competitive Economy (WashACE) to keep our state competitive and because of Washington’s high dependency on businesses for taxes and fees, fiscal responsibility, taxes and fees are high WashACE priorities.
Don C. Brunell, AWB President
