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Debate Over Washington State Budget Continues

By Marilyn Watkins

The first 30-day special session of Washington’s State Legislature hasn’t brought Senate Republicans and House Democrats any closer to agreement on the state budget. It’s looking like the gloomy predictions many made last January will come true – that the legislature won’t finish up until the end of June, when the threat of a government shutdown come July 1 might force action.

While the House budget is clearly the better choice for Washington families, neither side has proposed a budget and revenue package that would actually adequately fund the educational opportunity and services our people need in today’s economy.

Republicans who control the Senate claim we can increase spending on schools, cut university tuition, and move money from the General Fund to transportation – without raising taxes. To get there, they void the class-size reduction initiative voters passed last November, assume a big increase in marijuana consumption, shuffle funds around, throw in savings from unspecified “efficiencies,” and continue to skimp on compensation for teachers and state workers (while accepting an 11 percent increase in pay themselves).

When the May revenue forecast for the 2015-17 biennium showed a small uptick, a group of Republican Senators immediately proposed handing out half of the anticipated additional revenue in permanent new business tax breaks.

Democrats, who control the House are suggesting the wealthy and big corporations come closer to paying their fair share, in order to enhance early learning, K-12 education, mental health, and other services. They’ve proposed new revenue from a capital gains tax on investment income that would fall exclusively on the wealthiest, closing some tax breaks and restoring service business taxes to the 2012 level. But the Democrats’ budget also overturns the class size initiative and leaves the state a long way from fully funding McCleary, let alone restoring basic public services that protect our communities and provide opportunity for our children.

Washington’s tax structure has become the most unfair in the country, with low- and moderate-income families paying proportionately much more than the wealthy.

Most of our revenue comes from the sales tax and a gross receipts business tax. When the system was designed in the 1930s, that brought in enough to educate kids for jobs on farms, lumber yards, and factories.

Today – in an era of globalization, a service-based economy, rapidly changing technology, and soaring inequality – an income tax has to be part of any fair or sufficient system. State Treasurer Jim McIntire recently proposed a new tax structure with a 5 percent income tax, reduced sales tax, and revamped business taxes. His proposal would greatly improve both adequacy and fairness. But because it relies on a flat rather than progressive income tax and reduces sales taxes only a little, it still leaves lower-income families paying more than their fair share – and the rich paying not enough, especially given soaring income inequality.

Regardless of the merits of McIntire’s reform proposal, voters have been so skeptical of an income tax in the past that legislators are entirely ignoring it. Teachers across the state have taken to the streets in a series of one-day rolling strikes to put some pressure on legislators to act. On May 20 many state employees used their lunch break to rally.

It’s time for the rest of us to step up, too. Let’s assure our elected representatives that we’re willing to pay our share of the bills to educate our kids and keep our communities strong – but we’d like the wealthy and profitable corporations to pay their fair share, too.

Marilyn Watkins is Policy Director at the Economic Opportunity Institute and a member of PSARA.

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