The following is presented as part of The Columbian’s Opinion content, which offers a point of view in order to provoke thought and debate of civic issues. Opinions represent the viewpoint of the author. Unsigned editorials represent the consensus opinion of The Columbian’s editorial board, which operates independently of the news department.
One of the unexpected turns of the pandemic is how it led to a surge of tax money into state government. It was pretty clear from the start that the coronavirus crisis might be a boon to certain industries, like big tech, but government was widely predicted to be gutted.
Washington’s forecasters predicted a $5 billion hole in our state’s two-year, 2021-2023 budget.
But that was wrong (in defense of the forecasters, it was a once-a-century event). Tax revenues for the two-year period are now projected to come in $7 billion higher than expected, not $5 billion lower. This doesn’t include all the federal aid money, which added several billion more.
What’s interesting about this good news is what ruling Democrats are choosing to do with it. With the exception of some savings in rainy-day funds, they are moving toward spending virtually all of it.
At a budget hearing Monday in the state House, dozens of lobbyists and heads of government organizations and nonprofits gushed about the largesse. With big infusions into transportation, schools, salary hikes for state employees and other programs like paid family leave, the two-year budget is slated to be roughly 25 percent larger than the last one — a historic expansion in state spending.
Not every Democrat is thrilled, though.
“We’ve been balancing the budget on the backs of the working class and poor people for decades around here,” says Sen. Patty Kuderer, D-Bellevue, “and I felt it was time to ease up on that a bit.”
Kuderer and Sen. Monas Das, D-Kent, co-sponsored a bill to cut the sales tax from 6.5 percent to 5.5 percent. It never got a hearing.
The sales tax chews up far larger slices of low-income workers’ pay than it does for the wealthy. Because of our state’s overwhelming reliance on sales taxes, the Institute on Taxation and Economic Policy ranks Washington as the worst in its “Terrible Ten” states for gouging the poor.
Democrats started trying to shift this upside-down system last year by passing a capital-gains tax on stock profits of more than $250,000. But they haven’t followed up with planned reductions in the regressive taxes — and don’t appear very interested this year.
Politically we are an outlier. The Democratic governor of Maine, gifted with similar surpluses, announced $500 tax rebates for most taxpayers in her state. The California governor gave what he called “the biggest state tax rebates in American history.”
Some state Senate Democrats have proposed to expand a tax credit for the state’s smaller businesses. That’s a start. As for the people? They’re offering you … free parking passes at state parks.
We sent our state $12 billion extra, and all we got were these lousy parking tags? I know, the spending goes for many useful and good things, hence the outpouring of love for it last week. And I kid about the parking passes (please send me one).
But there’s a serious, longer-term political issue. If we’re ever going to get out of that Terrible Ten ranking, politicians first have to convince voters they aren’t going to simply add all the new progressive taxes on top of the old regressive ones.
It’s a big reason voters here keep rejecting a state income tax. According to polls, people worry the new taxes will pile on top of the old, more and more and yet never enough.
Democrats, you’re proving critics right.
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