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“In this world, nothing can said to be certain except death and taxes,” said diplomat, politician, founding father, and all-around good guy, Benjamin Franklin. But, if I may humbly add a third certainty, (some) politicians will never stop demanding new taxes.
Here's a bit of good news. Olympia doesn't have a revenue problem. The state's quarterly economic revenue forecast was released a couple weeks ago. Washington state is expected to take in an additional $247 million for the 2015-17 budget cycle and $303 million for the 2017-19 budget cycle. Along with the $3 billion over the previous biennium revenue that the state is taking in, that's an increase of $3.5 billion. It's clear our state does not have a revenue problem.
Read more about the revenue forecast here.
House Democrats introduce operating budget proposal with $8 billion in new taxes
While I appreciate the House Democrat's operating budget plan looks to spend more money on new policies and state provided services, it does so by emptying the pockets of taxpayers. In fact, the increased spending outpaces the earning rate of those obligated to pay for it.
The proposal raises taxes by nearly $3 billion for the next budget cycle, and $5 billion in 2019-21, for a total increase of $8 billion. It also includes a non-family friendly 20 percent business and occupation (B&O) tax rate increase of 20 percent on day-cares, hospitals, and grocery distribution. Day-cares, hospitals and groceries? Seriously? Say hello to the Grinch (Democrat) who stole Christmas.
Ready for an interesting state history lesson? Voters have rejected a state income tax on ten separate occasions. And yet, this plan relies on an income tax in the form of a tax on capital gains. Read more about the history of income tax votes in Washington.
Despite the plan's massive tax increases, which rely heavily on risky economic assumptions, the ending balance for the four-year outlook would be a pitiful $12 million. This is fiscally irresponsible for our state.
Keep your money in your pocket
In contrast, one of the best pieces of news about the Senate's operating budget proposal is you can keep your money in your pocket. There is no income tax, no carbon tax, and no increased taxes on border county economic activity. Even better, a portion of the “extraordinary revenue” from new economic activity will be transferred to the Budget Stabilization Account (BSA). This budget leaves our state's “rainy day” fund intact and healthy at nearly $2 billion.
The new revenue noted above gives the budget a boost. The Senate's operating budget proposal would spend $43 billion over the next 2017-19 budget cycle – a 13 percent increase from the current budget.
Education funding is the priority
Since Republicans took the reins of the operating budget in the Senate, our state has continued to make historic investments in education funding. The Senate's budget proposal clearly prioritizes education as it continues to build on the $4.6 billion (36 percent) in additional education spending made over the last two budget cycles.
In fact with this proposal, 50 percent of the operating budget would be dedicated to education. With this plan education funding will have doubled in a less than a decade (2011 – $13 billion; 2021 = $27 billion).
The Senate's plan includes a state-wide property tax system that is more equitable and fair. The general idea is to reduce inequities in how school districts are able to raise money. This change will equalize local property tax levy rates and spread the tax burden for schools across the state. Because a levy swap would result in property-rich districts paying more than property-poor districts, rates would be decreased in many communities.
What's next?
With only a few weeks left in the regularly scheduled session, debate and discussion will be focused on budget proposals from the House and Senate. We will spend several long days, and evenings, debating and negotiating priorities and details for a final operating budget plan for the next biennium. Maybe I'm an optimist, but I'm hopeful we will come to an agreement and finish session on schedule on April 23.
As always, I welcome your thoughts, comments and concerns. If you have an idea for how state government can work better, please contact me. My door is always open. You can reach me by email at richard.debolt@leg.wa.gov, or call my office at (360) 786-7896.
Sincerely,
Richard DeBolt
