During this special legislative session, as lawmakers grapple with how to balance the state budget, we need to protect public investments that help create middle-class jobs and grow our economy.
Now more than ever, it is crucial that the public understands the harm done by recent cuts to education, health care and other vital services, and what’s at stake if lawmakers continue to pursue that course. Providing a basic education is the state’s paramount duty and in its McCleary decision, the Washington State Supreme Court ruled that the state is not meeting its constitutional obligation to give our children an adequate basic education. A down payment on the court’s requirements will mean an additional $1.4 billion in the 2013-2015 biennium, according to the Joint Task Force on Education Funding.
It is important to note that Washington state has a revenue problem, instead of, as has been characterized by some, a spending problem. The Columbian in its May 8 editorial, “Prepare for Pain,” had some factual errors about the size of the state budget, incorrectly classified federal versus state funds, and used questionable sources to calculate the size of state government.
While we would all like to believe that future revenue growth, without changes in the tax system, will be enough to cover McCleary and our other needs, rebuild our state in the wake of the Great Recession and put people back to work, the truth is the economy is growing slowly, at best.
In fact, revenue will be about $2.7 billion short of the amount needed to sustain existing levels of public services and fund court-ordered improvements to education in the upcoming 2013-15 budget cycle.
Hindered by tax system
Due to a sluggish revenue recovery over the 2011-13 budget cycle, legislators cut more than $5 billion from investments that help make Washington state a great place to live and work. That’s not just numbers on paper — that’s more kids in crowded classrooms, people going without health care, families paying more in college tuition and going deeper into debt.
These things matter. In part, because our state tax system is old and crumbling, and our resources have been dwindling as a result. Crafted in the 1930s and focused primarily on taxing tangible goods, our revenue system is incapable of keeping pace with a 21st century economy oriented more toward services — such as pet grooming and teeth whitening — to which sales taxes ought to be applied. As a share of the state economy, revenues that help pay for services Washingtonians depend on are only at 70 percent of what they were in 1995, and are projected to keep falling into the foreseeable future.
The inadequacy of Washington state’s tax system is compounded by the fact that it is upside down. For households earning less than $20,000 a year, state and local taxes are nearly 17 percent of their income. At the other end, our state’s top 1 percent richest households — those making over $430,000 a year — pay 2.8 percent.
The best choice legislators could make for our state would be to lay a foundation for a strong economy by creating a robust and equitable revenue system that improves our schools, roads, health care and other public investments; ensures better opportunities for all kids; helps create better jobs; and rebuilds the middle class.
A good place to start would be eliminating tax breaks for big, profitable companies if those breaks aren’t helping to create jobs in Washington state. As we move forward with the special session, it is imperative that the public has accurate, honest information about the investments we make together through our state budget — and for lawmakers to acknowledge that further cuts will only set us back.
Remy Trupin is Executive Director of the Seattle-based Washington State Budget & Policy Center (http://www.budgetandpolicy.org).
