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Originally published Wednesday, April 24, 2013 at 4:58 PM

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House Democrats approve Wash. tax package

Democrats in the Washington state House moved ahead Wednesday with a plan that would increase tax revenue by $900 million over the next two years, staking out their position for the Legislature's final budget negotiations.

Associated Press

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OLYMPIA, Wash. —

Democrats in the Washington state House moved ahead Wednesday with a plan that would increase tax revenue by $900 million over the next two years, staking out their position for the Legislature's final budget negotiations.

Among the changes approved by the House is a permanent extension of business taxes to raise more than half a billion dollars. The plan would also repeal tax breaks for travel agents, bottled water and fuel.

Democratic Rep. Ross Hunter, one of the chamber's budget writers, said lawmakers were seeking to strike a balance this year.

"Is it more important to fund public education, foster care for children, early learning opportunities for at-risk kids ... or is it more important to hold on to a number of tax exemptions?" Hunter said.

Republicans balked at the tax proposals, arguing that they would hurt businesses and families. Rep. Terry Nealey said the proposals are an attempt to tax the state's way out of a recession.

"My great fear is it is going to extend this recession," Nealey said. The measure passed 50-47, with some Democrats voting against the plan.

Lawmakers did alter one tax change that Democrats had initially proposed related to nonresident shoppers. Border retailers are trying to protect a sales tax exemption for nonresidents in order to remain competitive with Oregon, which doesn't have a sales tax.

Under an amendment adopted by the House, the exemption would turn into a refund process. Nonresidents would initially pay the sales tax but could request a refund once per year.

The House is now engaged in budget negotiations with the Senate, which approved a budget without the tax changes. Hunter said the two sides have significant differences in their budget proposals and he "absolutely" expects the final budget to contain some new revenue options.

"We compromise," Hunter said. "We'll find a way to come to an agreement."

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