Income tax proposals prompt the question: What’s most important?
Because Olympia is a progressive community that values education and supports tax reform, we now have two initiatives to create a city income tax to pay college tuition: the Opportunity for Olympia initiative and an alternative from the City Council, supported by four of seven members. Last week, the Council took a step back, presumably to reexamine their proposal.
Whether the city proposal moves forward or not, the original initiative will likely be on this fall’s ballot.
Some questions to consider:
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Is the city the right place to fight this battle?
Washington state’s tax structure isn’t just unfair; it doesn’t work. State government is leaner than ever and, still, we’re not making ends meet. The McCleary decision—with estimates of an additional $1.76 billion needed each year for basic education—has made this even more apparent. State Treasurer James McIntire has proposed a flat 5 percent income tax—along with reductions in sales, property, and B&O taxes—to fund both K-12 and higher education. This spring, Sen. Reuven Carlyle requested an analysis of Washington and its neighbors’ tax systems. The finding: If we had Oregon or Idaho’s tax structures, which both include an income tax, we could pay the costs of basic education and we wouldn’t be in this mess.
With a court order fining the state $100,000 a day, there’s never been a better time for Washington state to rethink its tax structure.
What will be gained, and what will be lost, if one of these proposals passes?
Beyond legal expenses, are there costs in lost opportunities? The state budget crisis is already compromising the health and well-being of those most in need, sacrificing some in favor of others, and forcing us to make tradeoffs between schools, hospitals and prisons. A single-purpose city tax brings these tradeoffs to the local level, where funds are even more limited. Does passing this tax risk poisoning the well for financing priorities the community has already identified—like parks, affordable housing, and mental health?
Is higher education the city’s top priority? Does it fit on the list of city priorities at all? Do those of us who see dwindling access to higher education as a critical issue really believe cities are the right place to lead this? How should policy be made? With what degree of speed and forethought?
We are blessed and cursed with Washington’s lively initiative process. Time and again, at both ends of the political spectrum, we’ve seen voter-approved state initiatives go down in flames in the courts. The many issues nested within both the original initiative and the Council’s version are complex. Recently, the Home Fund group, working on a proposal for a county-wide affordable housing levy, decided to defer putting it on the ballot until 2017 so they could take more time to develop it. The implications of this tax measure are far more complicated and deserve at least as much examination.
What’s the best way to build a more equitable system?
Currently, Washington’s poorest citizens pay more of their income in taxes than anyone else—nearly 17 cents on every dollar they earn. The goal for those who support tax reform is to build a system in which those who have the most pay the most. But what are we saying when we target something as important enough for someone else to pay for, but not us? If access to education is a critical need, then shouldn’t we all—or those of us above a certain income level— pay for it, with top earners paying a higher percentage?
And, with limited resources available, do we really want to pay for college tuition for all, regardless of need? Instead, why not offer more than one year of assistance—and the opportunity to complete a degree—to those who truly need it?
What would it take to change your mind?
It’s my hope that all of us in Olympia—particularly those who support tax reform and access to higher education—will examine these proposals critically, thoughtfully, and with an eye toward the end game. We’re on the right track; we’re having the conversation. But, really, what’s the best way to get to where we want to go?
Rachel Burke, a state employee and resident of Olympia, is a member of The Olympian’s 2016 Board of Contributors. She can be reached via email@example.com.