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House candidates agree on reform, differ on process
POULSBO — The candidates for 23rd District state House, position 2, agree the state’s tax system must be reformed in order to make it fairer and boost jobs creation. But they have different views on how that reform should be accomplished.
Drew Hansen, a lawyer and appointed legislator seeking a full term in the House, suggests we “blow up the current system” but says Initiative 1053 is standing in the way of complete reform. He said it takes 51 votes in the House or Senate to create a tax loophole, but because of I-1053 it takes a supermajority vote to close one.
Henning B. Larsen, poker tournament director at Suquamish Clearwater Casino Resort, supports establishing a state income tax. Doing so would break the state’s dependence on sales tax revenue, which is volatile, and enable the state to ease the tax burden on businesses. Businesses pay higher taxes because there is no state income tax, he said.
“Our tax policy is regressive … We must expand our revenue base,” he said.
Washington is one of nine states that does not have a state income tax. It is, however, one of two states charging a business and occupations tax, which taxes gross income with no deductions allowed for labor, materials or other overhead expenses. The rate of taxation is not uniform for all businesses, based instead on the business’ classification.
James M. Olsen, a retired Coast Guard captain and past candidate for state House and local office, said he wouldn’t support establishing a state income tax, but would support a reform of the B&O tax, which is part of a system he calls “Byzantine.”
Tax reform, jobs creation and government spending have been dominant topics on the campaign trail and at a candidate forum presented by the League of Women Voters July 16 in Poulsbo City Hall. The two top vote-getters in the Aug. 7 primary will advance to the Nov. 6 general election. Members of the state House serve two-year terms and receive $42,106 and benefits offered state employees.
Regarding jobs creation: Hansen sponsored legislation that exempts Kitsap County from having to pay back-property taxes on forest land it might acquire for conservation and public use from Pope Resources. The tax, called a “compensating tax,” is paid when land is removed from commercial forestry, to make up for tax revenue that would have been generated by timber harvests. The exemption is worth about $7 million to Kitsap County, which can instead invest that money in land acquisition. Advocates of the acquisition of as much as 7,000 acres of Pope Resources land say the acquisition will create jobs in ecotourism and outdoor recreation.
Hansen also sponsored legislation expanding the engineering program at Olympic College, to train people for civilian jobs with the Navy and in maritime. He’d like to see the expansion to other fields with a presence in Kitsap, such as health care and software. In addition, the state moved up projects on its three- to five-year project lists because borrowing costs are low and the jobs are needed now.
Larsen said reforming the state’s tax structure would generate revenue necessary for investments in infrastructure improvements, creating jobs.
Olsen said the state could create more jobs by speeding up permitting, amending the business and occupations tax, and streamlining government to boost business confidence. He said business confidence is stagnant because the state is in “debt, doubt and decline.”
Regarding state investment in passenger ferry service: All three agree state funding for Washington State Ferries comes first. Hansen said he’d like to see the Port of Kingston’s SoundRunner passenger ferry succeed, but “our priority must be to fund our state ferries as the marine highways that they are.”
Larsen said the WSF derives 75 percent of its funding from gas tax revenues, which are dropping because vehicles are more fuel efficient, and people are carpooling or using alternative transportation. He said there needs to be “a new conversation” about how to adequately fund WSF, including possibly bringing back the motor vehicle excise tax.
Regarding reducing the cost of state government: All three support performance audits. Olsen said the state must identify and fully fund core, or essential, priorities. The state could partner with non-governmental organizations and others to fund second-tier priorities. He said budgeting for some services, such as transportation, should be performance-based.
On helping veterans integrate into civilian life: Hansen sponsored a bill that would have allowed military personnel coming to the end of their enlistments to register early for college. The bill passed the House, but the session ended before the Senate could vote on the bill.
Olsen said jobs are key to a successful return to civilian life. “We must create an environment where there are jobs, because that’s what they want.”
Larsen proposes making it easier for veterans to earn their college degrees, with credit for service.
On their ability to compromise: Olsen said he’s a consensus builder and knows how to work with people — skills honed in 30 years as a Coast Guard officer who had eight commands in his career.
Hansen said he sponsored legislation that had wide bipartisanship support. “I established a record in Olympia and I want to build on it,” he said.
Larsen said that if you put aside wedge issues, all legislators want the same thing: The best for their constituents. “If you want solutions, I’m going to work with you any way possible,” he said.
Regarding campaign contributions: Olsen has made an issue of contributions to Hansen’s campaign by out-of-state lawyers, decrying the influence of “special interests” in the election. “Special interests rob you and I of our voice,” Olsen said.
Hansen is unapologetic, saying he’s blessed with a successful law practice with colleagues in other states who want to contribute to his campaign.
As of mid-July, Hansen reported $161,034.08 in campaign contributions, compared to Olsen’s $6,230 and Larsen’s “few thousand.” Of the 143 lawyers that contributed to his campaign, 90 are lawyers with Susman Godfrey, of which Hansen is a partner.