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It’s too soon to put taxes on the table

Post by Patrick O'Callahan on Dec. 5, 2009 at 6:34 pm with 2 Comments »
December 4, 2009 6:38 pm

This editorial will appear in tomorrow’s print edition.

Next week, when Gov. Chris Gregoire proposes her spending adjustment for the remainder of the biennium, Washington will see what budget austerity really looks like.

The budget written in the 2009 legislative session was as painful as the state has seen in decades. People suffered. Students were excluded from higher education; poor Washingtonians were frozen out of subsidized health insurance; the state cut back on the supervision of many released criminals.

Since then, revenue projections have continued falling. The result is a projected deficit that now stands at $2.6 billion through mid-2011, assuming no new taxes. Really bad is about to get really worse.
We can’t blame Gov. Chris Gregoire and other Democratic leaders for talking tax increases. The Democratic Party is all about robust state services, and its lawmakers don’t want to preside over the skeletonizing of cherished programs.

All that said, it’s too soon to put taxes on the table.

This whole discussion should be framed by the understanding that tax increases are not friends of economic recovery. That’s especially true of Washington. This state’s revenue base essentially has three legs: property, sales and business taxes. Good luck trying to sell the public on a property tax increase, in this or any other year. That leaves the sales tax, which is already high, and business taxes, which are intrinsically burdensome to employers.

Both of the latter are economic drags. When sales taxes are more than a minor nuisance, less stuff gets sold, less commerce happens. Business taxes, in general, work against private investment and job creation. That’s not to say these taxes aren’t necessary, but there should be no illusion that raising them wouldn’t hurt economic recovery.

There’s no ignoring the public services side of the equation, of course. Prisons cannot be shut down and their inmates allowed to run free. The safety net cannot be destroyed. The mentally ill can’t be left to the streets. State colleges can’t shut their doors to students of limited means. Public schools must have decent funding.

But long before anything like a tax increase is contemplated, Gregoire and Washington’s lawmakers must demonstrate that they have made the kind of cuts in state government that so many businesses and families have been forced to make in their own budgets.

If it takes layoffs, lay off. If it takes pay cuts, cut pay. If it takes outsourcing, outsource. If there’s anything state government doesn’t have to be doing, it has to not be doing it. If civil service rules are preventing agencies from getting leaner and more efficient – much leaner, and much more efficient – change those rules.

Gregoire’s recent call to eliminate dozens of state boards and commissions is a welcome gesture, but it barely scratches the surface of the problem. It’s time to get radical. Lawmakers may think they did that in the last session, but state government has yet to subject itself to the kind of agony the private sector has endured. Until it does, or demonstrates why it can’t, new taxes are going to be a very tough sell in Washington.

Leave a comment Comments → 2
  1. norse1943 says:

    Time for state flat rate personal and corporate income tax, with adjustments to the sales tax,and property tax. Then we will all be paying our fair share and we will be able to adequately fund education, etc.

  2. where have all the unformed hero’s gone? they’ve been shot to death by jesus {maurice clemens} everyone. when will they ever learn, if you eat a donut and don’t pay attention you will get burned. a true tribute.

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