Tax Cuts: Scalpel Vs. A Chain Saw Gary Locke And Ellen Craswell Have Widely Differing Views

Ellen Craswell would cut taxes with a chain saw. Gary Locke would wield a scalpel.

Craswell, the GOP nominee for governor, favors a radical plan to eliminate three of the top four ways the state raises money. Under her plan, the motor vehicle excise tax, the state’s share of the property tax, and business and occupation tax would be history.

She’d chop more than $6 billion, or 34 percent, out of state revenues.

Craswell says she would phase her plan in, cutting all three taxes in half the first two years of her term and finishing the job in the last two. She says the cuts are a goal, not a promise.

Gary Locke, the Democratic nominee, wants to spend more on some things, not less, and trim some taxes. He would sponsor legislation to poke a hole in the state’s tax-and-spending lid so education funding could go up along with enrollment.

He also supports raising the gas tax to help pay for road improvements.

Craswell never met a tax increase she could vote for, earning the nickname “Senator No” during her 16 years in Olympia.

Locke voted for one of the biggest tax increases in state history in 1993, arguing the alternative was deep cuts in education. He now favors rolling that tax increase back to pre-1993 levels.

Locke says he wants to exempt more start-up firms from paying the business and occupation tax. He also supports giving tax breaks to companies that provide health and day-care benefits and training for employees.

Tax breaks on construction for business expansion could also help companies create new jobs, Locke says. Cutting taxes deeper than that is irresponsible, he says.

Craswell insists her plan wouldn’t require budget cuts equal to the hole she would chop in the tax base. Instead, she predicts cutting taxes will fire up the economy and generate more, not less state revenues.

Her plan has no equal nationally. Even GOP Gov. John Engler of Michigan, Craswell’s budget cutting role model, cut state spending by only a fraction of what Craswell has in mind.

Craswell’s promise to cut spending radically won’t be easy to keep.

By law she can’t cut basic education, debt service payments, or pension fund contributions. So $9 billion in spending, or more than half the current $17.6 billion general fund budget, is out of Craswell’s reach.

Other big-ticket items can only be cut so far. Prisons, mental health programs, services for the developmentally disabled and state nursing homes all have legal requirements for basic levels of service.

Cutting deeper leaves the state open to lawsuits from opponents.

Reducing social service spending, such as welfare and medical care for the poor and elderly, jeopardizes federal matching money. Every state Medicaid dollar cut throws away a dollar from the feds.

The federal welfare reform bill just passed by Congress also requires states to spend at least as much on welfare in the coming years as they did in fiscal year 1994. Every state dollar cut below the minimum requirement costs a dollar in federal matching money.

Restrictions on cutting all those parts of the budget - debt service, basic education, social services and prisons - means the deepest cuts would probably fall, as a matter of simple arithmetic, on the rest.

Namely: higher education; environmental protection; transportation, and general government programs like community and economic development.

K-12 education programs that aren’t part of basic education would also be vulnerable, including levy equalization spending that helps boost local school district budgets in Eastern Washington.

Education reform, budgeted at $36 million in the current budget, would be repealed outright, Craswell promises.

Craswell also says she wants to get the state out of programs she thinks are better handled by local government. Other government services could be carried out by private contractors, she says.

She offers few specifics, but when she does they often get her in trouble. At a debate in Seattle Wednesday, she would not name a single program she would be willing to cut.

Her state tax cuts would hit home in Spokane.

The motor vehicle excise tax pays for more than $450 million in local police, fire, transit and public health programs. In Spokane, the local share of the tax amounts to $2.2 million - a hefty chunk of the city’s $94 million in total general government revenues.

The city depends on the money for road maintenance, including street sweeping, road repairs and ice removal.

Voters have a clear choice: elect Locke, and they can expect targeted, tinkering tax cuts and a consistent push for generous spending on education and human services.

Elect Craswell, and voters can expect her to wheel state government into the legislative operating room for radical surgery on taxes, spending, and regulation.

Craswell, after all, doesn’t even support state licensing of day-care centers. Too much red tape, she says. Leave it to the private sector.

“We need to cut, cut, cut,” she told a crowd of more than 800 adoring supporters at a Seattle rally earlier this week. “Government is too big, too expensive, and too intrusive.”

, DataTimes