OPINION: ID priorities before OK’ing new Washington taxes

This editorial was published in The Columbian of Vancouver, Wash.

Washington’s 105-day legislative session is due to start Monday, and it’s already apparent that the defining task will be to pass a two-year operating budget.

Of course, drafting and approving the budget is always the centerpiece of odd-year legislative sessions. But this year could be the most difficult since the Great Recession. The forecast calls for a $12 billion shortfall between anticipated revenues and the amount of money needed to carry forward current state programs, and federal COVID-19-era funds are gone.

Maybe we’re too cynical, but here is how the session could set up: Both parties agree that the budget should be scrubbed for savings. But each party has vastly different ideas, and the Democrats quickly turn to raising taxes without consulting the Republicans.

In fact, a leaked memo and some public statements suggest that the Democrats might already be on the first train to Taxville. If so, their first priority appears to be increasing taxes on the wealthy and on businesses.

“We are trying to be as transparent as possible about the fact that this is not likely a budget shortfall that can be solved with cuts alone,” House Speaker Laurie Jinkins, D-Tacoma, told a reporter for the news site Washington State Standard. “We are trying to get ideas out on the table soon, so we can have a discussion about them and try to figure out collectively what’s the best path forward for this state.”

If true, that’s a laudable goal. But majority Democrats would do well to listen to their Republican counterparts, who see the unprecedented rise in state spending over the past few years as ripe for reexamination. Washington’s current two-year operating budget is about $70 billion. That’s 25% more than the 2019-21 operating budget of $52.4 billion.

House Minority Leader Drew Stokesbury, R-Auburn, told the Standard that Democrats have failed to exercise “any level of self-control over the past five years.” He says the state budget is full of good ideas, but they need to be prioritized so the state can live within its means.

That makes sense. Lawmakers first need to set priorities, and only then examine the impact of new taxes, both on state services and on taxpayers.

Assuming Democrats do follow through with their tax plans, one of the ideas calls for a 1% tax on an individual’s wealth in excess of $100 million. An estimated 3,400 people would have to pay it.

Another idea is to increase the business and occupation tax, starting with some bigger businesses. (Businesses pay business and occupation taxes on their gross receipts, regardless of profitability, unlike an income tax, where expenses are deductible. Income taxes are illegal in Washington.)

Some other ideas include a special levy on businesses with lots of high-paid employees. Consumers could be saddled with taxes on sales of guns and ammunition. There’s also talk of lifting the 1% cap on the growth of property tax receipts. That would affect all homeowners, and probably almost all tenants, because the increased cost presumably would be passed on by landlords.

Again, some of these tax increases ultimately may be necessary. The state has pressing needs in public education, in child care, in law enforcement, in mental health care, and in taking care of our elderly and vulnerable. As taxpayers, we want lawmakers of both parties to work together, set priorities, identify the gaps and then find the best ways to fill them. It will be difficult work, for sure, but the people of Washington demand and deserve no less.

TNS