Editorial | Taxes not answer to state deficit
January 12, 2010 · 1:35 PM
The Washington state Legislature convened on Monday, Jan. 11. Its members face a daunting task: the state’s projected deficit is $2.6 billion.
In keeping with state law, Gov. Chris Gregoire has proposed a balanced budget. Her proposal would not raise taxes, but instead would cut a wide swath of programs across the state. Not surprisingly, she doesn’t support her own budget.
That means she will be looking at adding revenue, and that means taxes. At a time when state residents are still in the grip of a down economy, asking them for more money isn’t the place to start.
She could increase the state property tax, but to do so would put both herself and any legislator who voted for such a move in peril.
The state also relies on a business and occupation tax, but the tax hurts those who are trying to grow their business, making it hard for them and hence the state to prosper.
The B&O tax is levied on gross revenue. That means a company can pay a stiff tax even if it doesn’t make a profit. It’s not surprising that this is one of the most unpopular taxes in the state.
There are probably some places or services that can stand a tax bump, but there’s no way to find $2.6 billion there.
The better answer is to look first at expenses.
State employees enjoy better benefits than most people in the private sector. They generally pay less out-of-pocket for their medical coverage. They usually get step increases in pay, which means more money each year just for remaining on the job. They often get a cost of living increase.
For most people in the private sector, it has been years since they saw any of this. Heck, most people would probably be happy if they could have remained where they were financially three years ago before their medical costs climbed and the pay stayed the same, or even slid.
Gregoire’s budget did make a dramatic case for what could happen if reductions were used to balance the budget. But she did it by showing draconian cuts in such programs as medical help for the poorest of the poor, and moving the state out of ongoing commitment to those among us who, for one reason or the other, simply cannot work.
It’s highly unlikely that the Legislature will go to that extreme. The budget deficit shouldn’t be an excuse to punish state employees. Far from it. By and large, they do good work. But so, too, do those in the private sector. The difference is that private industry has had to cut pay and benefits to stay competitive.
Legislators should look at state operations the same way. There’s no such thing as business as usual any more. Private industry has learned that painful lesson. State government should face the facts.
Craig Groshart is the editor of the Bellevue Reporter.