Compromise on key tax bill could lead to movement on budget impasse

by: Essex Porter Updated:

OLYMPIA, Wash. —

One compromise could lead to another as Washington State lawmakers work to avoid a government shutdown at the end of the month.

Democrats and Republicans in the House of Representatives have a reached a compromise on a bill to fix a loophole in the estate tax that could take millions of dollars from K-12 education.

The loophole was created by a state Supreme Court decision that exempts many married couples from the estate tax.

“We agreed with the Senate that we would create a new small business exemption for family owned businesses of about two and half a million dollars, “ said Democratic Representative Reuven Carlyle

of Seattle.

Olympia Republican Gary Alexander agreed to the compromise in hopes that it will set an example for compromise with the Republican dominated Senate on the larger operating budget.

“That is why I elected to vote for that,” said Alexander. “I was hopeful that it would show some movement that we're trying to work together and reach a consensus here soon.”

There were doubts the Senate would approve the estate tax compromise with the failure to pass resulting in the state mailing out $12.2 million in refund checks at 8 a.m. Friday.

But just before midnight, an agreement was reached and the estate tax legislation passed. Governor Jay Inslee released the following statement:

"It's great news that the Legislature acted tonight to protect the Education Legacy Trust Fund by voting to fix a glitch in our estate tax law. That loophole would have let wealthy couples avoid paying estate taxes

that single and divorced individuals must pay. The legislation I will sign tonight restores the original intent of the voter-approved estate tax -- to ensure that the wealthier among us, upon their passing, contribute to

the future of this state. The bill also provides tax relief for family-owned businesses while not reducing support for the Education Legacy Trust Fund. Now that we have gotten over this hurdle, lawmakers need to

shift their focus to approving a sound budget that helps us meet our constitutional obligation to fund basic education. We need to see compromise and good-faith negotiations on the operating, capital and

transportation budgets that must be passed."