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Originally published Friday, October 26, 2012 at 5:35 PM

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Voters to weigh in on petroleum, bank-tax decisions

Washington voters for the first time will give an advisory opinion on taxes approved by the Legislature.

Seattle Times Olympia bureau

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OLYMPIA — Washington voters for the first time will give an advisory opinion on taxes approved by the Legislature.

State lawmakers this past session overwhelmingly approved extending a petroleum tax that goes into the state pollution-liability-insurance trust account, as well as a measure that removed a tax break for certain large banks.

Initiative 960, approved by voters in 2007, requires a two-thirds vote in the state House and Senate to approve taxes. Although that requirement was met when lawmakers extended the petroleum tax and eliminated the tax break, I-960 also requires a nonbinding public-advisory vote when lawmakers approve taxes.

I-960 was reimposed by initiative in 2010, and initiative promoter Tim Eyman has another measure on the ballot, Initiative 1185, to renew the requirements again.

"If Olympia raises a tax and doesn't let the voters vote on it, the voters should have a right to ... express some kind of opinion on it," Eyman said. "We want legislators to be thinking of their constituents when they take a vote."

Eyman said that if voters reject the taxes approved by lawmakers, he hopes the Legislature will repeal them. It also should make legislators think twice about future tax increases, he said.

Sterling Clifford, a spokesman for Democratic gubernatorial candidate Jay Inslee, said in an email that Inslee has supported closing the tax break for banks. If voters rejected the taxes in an advisory vote, "I don't anticipate Jay would proactively move to repeal legislation passed with a two-thirds majority" of lawmakers, he said.

Republican gubernatorial candidate Rob McKenna's campaign declined to comment. "I can't distract Rob from our goal long enough to go through this hypothetical scenario," spokesman Charles McCray said in an email.

The petroleum tax extended by the Legislature goes to the Washington Pollution Liability Insurance Agency, which was created in 1989 to make pollution-liability insurance available and affordable to the owners and operators of regulated underground petroleum-storage tanks.

State records show the Washington Oil Marketers Association and Western States Petroleum Association both supported extending the tax until 2020. It was due to expire next July. The measure, House Bill 2590, passed almost unanimously in both chambers and is projected to bring in about $24 million over 10 years.

A separate law approved by the Legislature got rid of a tax break for large banks by eliminating a business-and-occupation-tax deduction for interest on residential loans. The change affected only banks with branches in more than 10 states. The tax break was worth $170 million over 10 years.

The measure, Senate Bill 6635, passed the Senate with a 35 to 10 vote and the House 74 to 24.

Andrew Garber: 360-236-8266 or agarber@seattletimes.com

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