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A tax package to stir debate

Post by Kim Bradford on Feb. 18, 2010 at 7:50 pm with 3 Comments »
February 18, 2010 7:50 pm

This editorial will appear in Friday’s print edition.

Someone had to go first, and Gov. Chris Gregoire apparently drew the short straw.

The governor took the lead for lawmakers Wednesday, offering a tax package to help fill the $2.8 billion hole in the state budget. Her plan: raise $605 million in targeted tax increases and recapture $154 million more by effectively invalidating a recent court ruling that favored out-of-state businesses.

Gregoire had previously retreated from offering a second version of the all-cuts budget she proposed in December. But it had become apparent that Democrats in the Legislature, deeply divided over the size of a tax package and rightly fearing a backlash, weren’t going to make the first move.

“At the end of the day somebody’s got to step off the curb,” Gregoire told reporters.

And so she did, right into the path of a moving bus. Several of them, actually. Republicans and businesses say her plan is irresponsible for raising taxes. Liberal Democrats say it’s irresponsible for not raising more taxes.

At least Gregoire got the debate started.

The governor places the burden where it should be: on budget cuts. She would still trim $1 billion from the short-term cost of state government, using the additional tax revenue to “buy back” crucial services such as health care for the working poor and state need grants for college students.

Gregoire also relied largely on smaller, targeted taxes. They have the unfortunate effect of concentrating the pain on a few industries, but they would be easier to roll back once the state is out of this crisis.

The same can’t be said for the flawed proposal to triple the state’s tax on petroleum, pesticides and other chemicals that Gregoire embraced. Its justification is stormwater cleanup, but most of the money would flow to the general fund – and legislators would likely find it hard to turn back that tide in future years.

Lawmakers also should beware diminishing returns. A tobacco tax that adds $1 to the price of a pack as Gregoire has suggested is likely to drive smokers to shop for their smokes elsewhere.

Unfortunately, perfect solutions exist only in hindsight this year. As much as the economy has battered Washington, so too has lawmakers’ inability to say no during flush years. Now the state has few outs that won’t leave the safety net in tatters and higher education in shambles.

Perhaps the best attribute of Gregoire’s plan is how it undercuts her fellow Democrats’ call for greater reliance on new revenue. Every additional tax dollar they take is another roadblock to recovery – of the state economy and of state coffers.

Legislators can’t tax themselves out of this hole. A sustainable budget still depends on making meaningful changes to the way state agencies operate. Lawmakers – Democrats and Republicans alike – have put forth some sweeping proposals for reshaping, reorganizing and reforming government. The extent to which they survive the session will indicate how serious the Legislature is about not taking the easier way out.

Leave a comment Comments → 3
  1. mattersnot1 says:

    Budget cuts? Where? I’ve read HB 3183, prime sponsor, Dennis Flannigan. Yeh, the guy who just announced he won’t run for the legislature again.
    This Bill will raise over $5.8 Billion for the State in 5 years time. Read where the money goes and how it’s to be handled;___ any way they want!
    I’ve also read HB 3186. It will raise over $255 Million in just 9 years time. It claims to use the money for seniors and the disabled, but in reality, it will tax the very people it claims to help.
    That’s not the end of increased taxes and fees. There are dozens more Bills being rushed through this session that will deflate our wallets.

  2. The tax makes no sense. Tax bottled water at 1c per once and soda at 5c per 12 oz. That’s 17c per bottle of water vs 5c per can of tooth decaying soda. My case of water at Costco will go up $5.10 while a case of soda will go up $1.20. The tax on the water will cost more than the water itself!!! And what when the economy turns around? Will these taxes be repealed or will we be stuck forever? Add to this a proposed increase in the sales tax. Can you say TEN PERCENT with a straight face?
    How do I spell relief??? O-R-E-G-O-N!! Where the poor and middle class don’t carry the burden of taxes for the rich and the Governor and legislature isn’t dumb enough to keep tapping the same keg. Will the last person leaving Washington please douse the light?

  3. Maybe now the local Indian “Smoke Shops” retailers can consider adding more retail sales stock; for example, water, pop, gum, and candy products.

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