Published December 07, 2012
State needs revenue structure for 21st century
Now that we know who our new governor will be, it’s time to turn our attention to what direction our state will take. Many challenges lie ahead for Gov.-elect Jay Inslee. It is vital that he and his administration establish clear priorities from the outset. A good place to start is to recognize we cannot give our children the kind of education they need to grow and prosper without more resources for our schools. To meet our children’s needs and make improvements to our schools as required under the state Supreme Court’s McCleary decision, we’ll need new revenue. To assert otherwise is wishful thinking. Without revenue, policymakers will be faced with making new deep cuts to all other areas of state spending. If it comes to that, the scope of these cuts will be unlike anything we have seen and would result in a systematic dismantling of vital structures built up over the years that ensure the success of our kids and our state’s shared prosperity. Fortunately, there is a realistic way to achieve our goals for our children, one that will also strengthen the state’s economy in the long run. It includes taking common-sense steps to bring in more revenue. In the McCleary decision, the Washington Supreme Court ruled that the state is not meeting its constitutional duty to give our children an adequate basic education. To meet the court’s requirements, the state will need at least $3.6 billion in the next four years, according to the state Office of Financial Management estimates. We are nowhere near having that kind of extra money, now or in the foreseeable future, as things stand. While we would all like to believe that future revenue growth without changes in the tax system will be enough to cover our needs, rebuild our state and put people back to work, the truth is that the economy is growing slowly, at best. State economic forecasters project that revenues will fall $2 billion short of meeting our needs in the next two-year budget cycle and $3 billion in the 2015-17 budget cycle. Even in better times the state doesn’t take in enough money to meet needs, due to an antiquated tax system that can no longer do the job. To abide by McCleary without additional revenue, lawmakers would have to deeply cut health care, public safety and transportation – the very things that help Washingtonians and our economy thrive – on top of the sharp reductions they’ve already endured because of the recession and a sluggish recovery. Gov. Chris Gregoire has said she will propose new funding for education before she leaves office in January. She knows that it cannot be done without new resources. To get people back to work and build a strong economy, it takes first-rate schools, affordable colleges and universities, and a healthy, productive workforce. Washington needs a revenue mix built for the 21st century. That means eliminating wasteful tax breaks, modernizing our state sales tax to include more consumer services and taxing gains on the sale of stocks, bonds and other high-end financial assets held by the wealthiest two percent of Washingtonians. Now that the campaigning is over, Inslee should have a direct conversation with the people who elected him about what it will take to make Washington the kind of state we will be proud to hand off to our children. Remy Trupin is the executive director of the Washington State Budget & Policy Center, a nonpartisan research organization.