April 27, 2014 in Opinion

Smart Bombs: Taxing the cheapskate state

By The Spokesman-Review
 

Election season is rapidly approaching in Washington state, and I’m bracing for the inevitable line that punctuates so many political pitches: “We don’t have a revenue problem.”

If not, we must have meth-addled money managers, because both parties acknowledge gargantuan financial shortfalls for elementary education, higher education, transportation and parks – just to name a few.

On the off-chance the state needs more cash, can Washingtonians afford it?

Let’s review the scorecard from the Tax Foundation. In 2011, the latest year figures were tabulated, Washington’s state and local tax burden ranked 27th in the nation. The typical citizen paid $4,336 in taxes on $46,456 in income. That’s 9.4 percent, while the national average was 9.8 percent. The take in tax-hating Idaho was 9.5 percent.

Our state’s tax burden is lower than average, while annual per-capita income is about $4,000 above average. Looks like some wiggle room to me.

Then again, if we don’t have a revenue problem, then there’s no point in adding more. So let’s look at that.

The Great Recession took a toll. The state has only recently returned to the fiscal levels of 2008, while the population has grown by 350,000. Lawmakers cut $11 billion to balance the budget over those lean years.

The state Supreme Court said the Legislature made “meaningful steps” last year when it pumped $1 billion more into financing basic education, but in January it also said lawmakers need to pick up the pace. Now the justices are awaiting a plan on how lawmakers plan to go about injecting billions more into K-12 education between now and 2018.

Seems odd when we don’t have a revenue problem.

The state used to be able to pay for 70 percent of a student’s college education, but now it’s more like 30 percent. As a result, tuition has ballooned to stratospheric levels. Meanwhile, more than 30,000 students who qualify for the State Need Grant go begging. Washington STEM reports that the state ranks fourth in tech-based corporations but fourth from the bottom in students pursuing science, technology, engineering and math educations.

If we had a revenue problem, those would be difficult issues to resolve.

Transportation serves up its share of potholes. Four years ago, the Washington Transportation Commission told lawmakers the state has between $175 billion and $200 billion in unfunded state and local transportation needs over the next 20 years. How about that North Spokane Corridor? Sure handy, eh?

If we weren’t awash in revenue, we’d have to raise the gas tax and find other revenue streams to tackle the challenge.

I trust you have a Discovery Pass, because that’s pretty much how we finance state parks now. The Legislature cut general fund revenue for parks from $94.5 million in the 2007-09 biennium to $8.5 million today. Plus, aging park buildings need $500 million in upgrades.

Better buy two passes, because it doesn’t look like the Legislature is interested in replenishing that budget. Which is odd, since we don’t have a revenue problem.

Or do we?

Maybe it’s time to do the math, rather than repeat the mantra. For starters, here’s a data point from the Washington State Economic Revenue and Forecast Council (2013):

“State revenue collections in 1990 were about 7 percent of total personal income. Today, state revenue is lower than 5 percent of total personal income – lower than it was in the 1960s.”

The math seems to point to a different problem: We talk like progressives and tax like cheapstakes.

But if candidates claim otherwise, ask them to show you the money.

Associate Editor Gary Crooks can be reached at garyc@spokesman.com or (509) 459-5026. Follow him on Twitter @GaryCrooks.


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