Editorial: Sensible approaches to justifying tax breaks

What if the state Legislature adopted a tax exemption and nobody knew why? It would probably stay on the books, as some ancient ones have.

What if the circumstances surrounding the original purpose for an exemption had changed, making it debatable that it still served a broader public interest? Since getting rid of it would raise somebody’s taxes, it would take at least two-thirds of the members of each legislative chamber to agree. This supermajority requirement was recently affirmed by the voters when they adopted Initiative 1053.

This current state of affairs cries out for reform, and two bills address the issue.

House Bill 2762, introduced by state Rep. Reuven Carlyle, D-Seattle, and Rep. Glenn Anderson, R-Fall City, is the more sweeping and desirable of the two, because it deals with current exemptions. Senate Bill 6088 would only address future exemptions, and it has already sailed through the Senate.

Both bills would affix sunset clauses to tax exemptions to make sure they’re periodically evaluated. As the expiration dates come due, the proponents would have to make the case that the exemptions are still worthwhile. It’s similar to what school districts must do with levies, except legislators make the determination.

Both bills would require that the purpose and expected benefits of exemptions be explicitly stated.

It should be stated up front that neither bill is a panacea for the budget woes facing the state. Through the years, proponents of tax-break reviews have exaggerated the amount of revenue that would potentially result from reform. A Department of Revenue analysis of 452 exemptions, including one for newspapers, found that eliminating them could raise $24 billion over two years, according to a Seattle Times article.

But that isn’t going to happen. Only 14 percent of them have an expiration date, and most would probably survive, because they do serve a broader public interest.

Six years ago, the Legislature established a panel to examine tax breaks, and it only came up with six recommendations for mothballing. Those six breaks are still on the books. In some cases, the panel didn’t know what to recommend, because the purpose and expected benefits of the exemptions remained a mystery.

The House bill is tantamount to performance audits, where the state periodically analyzes whether agencies are appropriately and efficiently spending taxpayer money. It’s a good idea, but not a difference-maker in the overall budget scheme.

We prefer the House solution, because it addresses current inefficiencies and places the burden of proof on the beneficiaries once the expiration date nears. But because of Initiative 1053 (some taxes would go up), it will take a supermajority of both chambers to pass it.

The odds aren’t good, but that still leaves the Senate bill, which could serve as a fallback position. It wouldn’t address current unworthy breaks, but it would stop them from proliferating.

Both measures represent smart approaches to improving government. Legislators ought to climb aboard.