Rep. Sam Hunt, D-Olympia, said he and fellow lawmakers got caught by surprise by the depth of the revenue shortfall that hit this state. As a result, Hunt said, legislators had practically no time to do any advance planning.
And the revenue hole, which started at $3 billion and grew to $8 billion, kept getting worse as lawmakers tried to cobble together a $31 billion state operating budget for the 2009-11 spending cycle.
We would argue that lawmakers should have seen the declining economy. Experts say this recession began in December 2007, a full year before lawmakers convened to write a budget. And certainly the state housing market and national financial markets were in decline well before the legislators convened in Olympia on Jan. 12.
We would also note that the declining revenue and the awful budget that lawmakers were forced to adopt, show just how regressive Washington’s tax structure is.
The need for tax reform is long overdue.
That effort has to come from Gov. Chris Gregoire and legislative leaders. They simply must engage the public in a constructive conversation about this state’s overreliance on property and sales taxes and how the missing third leg of the stool — an income tax — is necessary to level out the revenue peaks and valleys that this state constantly experiences.
The good times are really good, but the downturns are excruciating.
State leaders might have an easier time educating and engaging the public on tax reform after July 1 when the cutbacks ordered in the new budget take effect.
The 22nd Legislative District, which includes most of Olympia, Lacey, Tumwater along with Cooper Point, Boston Harbor and Johnson Point, likely will be one of the hardest hit – if not the hardest hit – in the state.
That’s because state government, colleges and school districts are primary employers. And all three taxpayer-supported institutions are going to take deep financial hits. State employees, and that includes college employees and K-12 teachers and staff, will not receive cost of living increases. They will have to pay more for their health care and hundreds, maybe thousands, will lose their jobs.
Those cuts will ripple through the rest of the local economy because people have less money to spend on groceries and other goods and services.
Add in South Sound’s share of cuts in basic health services and cuts to programs serving vulnerable adults and needy children, and Rep. Brendan Williams, D-Olympia, says candidly, “People will die as a consequence of this budget.”
That’s the grim reality of the budget that lawmakers adopted on the last day of the 105-day session before they adjourned and scampered out of town.
Williams said legislators managed, but didn’t lead, the state through the budget crisis. He’s right.
That’s what is desperately needed at this point – strong leadership to educate the public on the need for general tax reform.
Granted, Gov. Gregoire and legislative leaders start that process from a huge hole. Members of the public believe that any talk of tax reform is a thinly veiled effort to increase taxes.
That is to say there’s a huge gap in this state – a chasm of mistrust. The public, at least most members of the public, are not well educated on government operations and are even less schooled on the state’s tax structure. They simply don’t trust their elected leaders to reform the tax structure in an honest way that doesn’t reach deeper into their pockets.
The Tim Eymans of the world play to that lack of public knowledge. They throw in a healthy dose of emotion, and stampede the public into rash decisions that further cripple this state’s ability to create a reliable, balanced tax structure that can weather the best and worst of economic times.
All three 22nd District legislators, Hunt, Williams and Sen. Karen Fraser, D-Thurston County, said they would have supported tax increases during the recently completed session. They never got the chance to vote, at least in a serious manner on those proposals, because legislative leaders lacked the courage of their convictions. They also lacked enough votes to push any of the proposals through the House and Senate.
But that doesn’t diminish the need to have the tax reform conversation — a conversation that begins with public education on the existing tax structure and its fatal flaws that will become all too obvious to the public when the budget cuts hit this summer.