Washington state’s business, media and political establishment are often breathtaking in their lack of boldness, so I guess it should come as no surprise that, faced with a nearly unprecedented economic and budgetary crisis that has finally ripped the mask off our decades-old structural revenue deficit, the few calls for real change are being shouted down with deafening cries of “No we can’t!”
Take for example today’s Seattle Times editorial endorsing a 30% tuition increase over two years to help offset dramatic funding cuts. Yes, I agree that tuition “should rise significantly to preserve student access, quality and years of progress toward preparing a sophisticated work force,” and without a doubt, these “whopper tuition increases” are somewhat mitigated by the fact that our state schools are an absolute “bargain compared with peer institutions.” And it’s hard to argue against the notion that, as painful as it might be, given the size of the impending funding cuts, “it would be much worse without the tuition jump.”
But nowhere in the editorial did the Times mention anything about financial aid. Not once.
And then there’s the news today that a temporary sales tax increase is once again gaining traction, a week after dreadful polling convinced most lawmakers that such a ballot measure would be virtually dead on arrival. The solution? No, our special Olympians aren’t rallying around an innovative high-earners income tax (which actually polls well), but instead, are coming back with a smaller, third of a cent sales tax increase proposal in the hope that voters might reluctantly swallow this less painful pill.
You know, conventional wisdom says that an income tax is a nonstarter, whatever fairness or simple math or recent polling says, so why even bother to go there?
The problem is, both these solutions, the tuition and the sales tax hikes, are half-measures that may make the budget easier to balance in the short term, but do absolutely nothing to address our long term problems. And both solutions place their financial burden solely on the backs of those who can least afford it. Both solutions, on their own, only make our revenue system less fair and less stable, and in the long run, will only serve to undermine working class Washingtonians’ faith in the ability of our state government to adequately meet their needs.
Increase tuition and fees by $3000 a year, and our schools will still remain a bargain compared to “peer institutions,” but without a commensurate increase in financial aid, many of our state’s low and middle income students will be priced out of an opportunity to attend a four-year university. And if voters cooperate and agree to temporarily raise the sales tax a mere third of a cent on the dollar, we’ll save some crucial health care services now… only to watch them trickle away over time once the increase sunsets and the steady erosion of our state government’s purchasing power continues unabated.
Now, in this time of crisis, we have the opportunity to ask voters to grit their teeth and join us in embracing real change… and all we seem to get out of our so-called leaders are half measures.
Well, personally, I’m tired of half-measures, and morally conflicted about continuing to join the current Democratic establishment in fighting half the battle, when it has become increasingly apparent that they will never fulfill their promise to join me in fighting the other half. Long term revenue adequacy can never be achieved without tax fairness, and the refusal (with few notable exceptions) to publicly acknowledge this simple truth, undermines our ability to achieve either.
“I don’t know, Yogi. Mr. Ranger’s not gonna like a state income tax!”
“Don’t worry about a thing, Boo Boo, it’s been 35 years since he’s even thought about it!”
California and every other state with an income tax has had highly variable revenues because “income” has had its ups and downs depending on the stock market. So, let’s say we do a bold measure and have an income tax on people earning above $250K (presumably an individual, not a couple) Then let’s say the state makes a forecast based on this income, and then oops, the tax doesn’t bring in as much as projected. So then what happens: raise the rate on the high income earners, or broaden the base by moving the level of income taxed from $250K to something lower.
1 or 2 % is doable for a lot of high income earners. But just keep in mind Obama wants to raise their income taxes too, and also wants to cut their deductions, and wants to impose a tax for social security purposes on the income above a certain level. At some point, something gives. Who really pays? Where does the money go now that would instead be going to the state and to DC? That’s the big unanswered question. When a luxury tax on boats was imposed, it was the boat builders who ended up with layoffs.
Maybe we can frame the argument in such a way that politicians against (or afraid of broaching)the subject of a state income tax wouls be branded as Boo Boo Bears.
re 2: Hello, Boo Boo.
I think the support in the legislature to “go there” in terms of income tax talk, is directly connected to viability of this and other funding options which may be put before the voters.
If sales tax is DOA regardless of what it may fund, and a high end income tax with some sort of sales tax reduction polls well, then legislators will have a very clear choice.
All cuts, or high end income tax.
The income tax faces at lease three hurdles. Depending upon which house and who you talk too, and how it is structured, you may need a 2/3 vote to send it to the ballot. Then the voters would have to support it and then you may face a legal challange. Even if the legal challange could be won, the delay could cause a delay in accessing the funds and thus not doing much to backfill the budget gap.
“many of our state’s low and middle income students will be priced out of an opportunity to attend a four-year university”
And for many, that will translate into a lifetime of lower earnings, which will mean lower revenues for the state.
If there’s one thing conservative businessmen are good at, it’s using money efficiently. They invest and spend where necessary, but no more than necessary. Any good businessman understands that if they stop investing in the things that are essential for their business, the business will stop making money.
There are many things that set America apart from other societies. There are several factors in our becoming an economic superpower, in morphing from a frontier society into the consistently most productive economy in human history. The adoption in the 19th century of universal public education looms very large in this outcome.
To disinvest in educating talented and motivated youth who lack the means to pay more for access to our public universities is a stupid business decision. Functionally, it’s the same thing as a business getting rid of its equipment and talent to pare the cost side of its financial ledger. It guarantees a smaller and less productive enterprise in the future.
When a good businessman has to cut costs, where he chooses to cut makes all the difference in the world to the business’s future prospects and prosperity. Disinvesting in education is absolutely the worst thing we can do for our state economy. It’s better to release nonviolent prisoners, to cut back on transportation projects, to raise taxes on those who have been escaping taxation. All of these things will have less contracting effect on the future economy than sacrificing our human capital.
And what the Times advocates — raising tuition without offsetting financial aid for those unable to pay — is even worse because it will entrench inequity even more deeply into our social system. The resulting social frictions will be a substantial drag on our society’s productivity.
@2 What a load of hooey. Employment affects state revenues vastly more than the stock market does. And, contrary to wingnut arguments, jobs are created by customers, not by investors. If consumers don’t have money to spend, the economy won’t have jobs and businesses won’t have sales or profits, no matter how much investment capital is sloshing around.
The U.S. economy does not have a shortage of investment capital. Trillions of dollars are sitting in Treasuries, earning negative interest (i.e., less than the inflation rate), because there’s no place to invest it.
Our economy does have a shortage of wages — brought about by years of rightwing policies aimed at destroying unions, pushing down wage rates, keeping the minimum wage low, reducing or eliminating benefits, and sending jobs abroad. Guess what, consumers no longer have the means to spend, and businesses are hurting because they have no customers. Throwing more tax breaks at investors, at the expense of the working class, will only shrink consumption even further.
The idiotic conservatives’ economic chickens have finally come home to roost.
In short, my position is this: If or when it is shown that an income tax (stands the best chance of passing)or could be ratified and become part of the answer to our budget situation, I will join you Goldy in being mad and frustrated at legislators and the governor if they go forward with an all cuts budget without a funding proposal or with a DOA proposal.
If we do have a state income tax, we need to be realistic about how the revenue it brings in may vary a lot from year to year. The income that is taxed is comprised of both earned income and capital gains. The latter can vary a lot from year to year, depending on the overall stock market, IPOs, options etc.
Again – no new income taxes needed. Just do away with 3 Strikes law – do away with victimless crimes (tax activity like pot smoking and prostitution) and remove the tax exemption for churches – problem solved – surplus. Next?
Creating yet another tax, especially an Income Tax before we right-size State Government is a bad idea.
Once enacted, they will quickly raise rates and lower threshholds to fleece more $$ from taxpayers.
And the Sales Tax..it will rise too.
We must stop feeding the ugly beast of State Government in order to force long overdue reforms.
Vote Hell No on all tax increases!
re 12: State taxes began to rise when Reagan cut a lot of Federal programs that the states then had to try to take up the slack on.
Cheap things are never good and good things are never cheap.
Sales Tax Hike will be a Tough Sell to Washingtonians
http://www.moore-info.com/MI_WATaxes4.09.htm
stillbentover
We’re not interested in seeing a stillbentover family reunion. But Puddy would love to see stillbentover in da hood!