Washington GOP blocks tax on employers

OLYMPIA -- Senate Republicans invoked Initiative 960 on Saturday to block legislation they say would create a new tax on employers to pay for worker retraining.

At issue was Senate Bill 5809, which would divert 0.1 percent of the amount employers pay into the unemployment compensation fund by 0.1 percent of taxable wages. The money would be used for work force training grants for laid off workers.

The state has to create a new fund for the training program because federal law doesn't allow money from the Unemployment Insurance Trust Fund to be used for anything but unemployment benefits.

The diversion would allow the state to put money into the fund without raising employers' net taxes, supporters said.

The measure also proposes to scale back a recently passed boost to unemployment benefits from $45 extra per week to $31 extra per week for laid off workers.

State Sen. Janea Holmquist, R-Moses Lake, argued that diverting a portion of the taxes in essence creates a new tax on employers for the worker training grants. Initiative 960 -- passed by voters in 2007 -- says any new tax has to get approval of two-thirds of the members of both houses of the Legislature.

"We need to look at what is really happening to the funds in the bill," Holmquist said. "Employers are paying into a fund for work force training grants; this is a new tax, and the fact that their unemployment insurance premiums are being reduced by an equal amount does not change this."

Holmquist also said that by diverting tax money, the bill would drain $56 million from the trust fund.

"The Unemployment Insurance Trust Fund is paid by employers to provide benefits to unemployed workers," Holmquist said. "To protect workers, we must protect the integrity of the UI fund."

Lt. Gov. Brad Owen, who presides over the Senate, agreed that the bill met criteria in Initiative 960 to require a two-thirds supermajority to pass.

The initiative recently was put to the test in a lawsuit filed by Sen. Lisa Brown, D-Spokane, over a measure attempting to reinstate a liquor surcharge. The state Supreme Court on Thursday declined to interfere in Owen's decision as president of the Senate and dismissed the case.

Democrats asked to defer the bill for further consideration before adjourning Saturday afternoon. The Senate resumes Monday morning.

Sen. Jeanne Kohl-Welles, D-Seattle, chairwoman of the Senate Labor, Commerce & Consumer Protection Committee, said in a written statement that Democrats believe worker retraining is important to economic recovery and will keep the bill alive.

"There is little question that our economy is restructuring, and our workers need to retool their skills for the jobs that will get us out of this recession and rebuild a strong economy for our future," she said. "There has to be balance between helping our businesses and helping our workers. It cannot be one or the other. Tax breaks are a part of the solution, but can't be all of the solution."

Also Saturday, the Senate unanimously passed a bill that would prevent pet owners ordered to forfeit animals after being convicted of animal cruelty from owning or caring for similar animals.

Senate Bill 5402 would stop animal abusers from owning or caring for animals in the same genus permanently after one conviction of first-degree animal cruelty or two convictions of second-degree animal cruelty.

A first conviction for second-degree animal cruelty would result in a two-year ban from owning animals in the same genus, meaning someone convicted of abusing a cat could not own or care for another cat.

Someone convicted twice for second-degree animal cruelty could petition a court to have the right to own or care for animals restored after five years.

The bill now goes to the House for consideration.