Governor's revenue proposal makes progress, but more is needed

On Wednesday, Governor Gregoire proposed a revenue package to help maintain core public priorities, like educating our children.  In total, the Governor’s latest proposal would generate some $605 million in new resources in the current biennium. (Elements of the proposal are listed below.)

This is a step forward, but more action is needed.  Though her proposal would prevent a number of painful cuts, important services would still be cut by about $1 billion this year, after accounting for transfers from the state rainy day fund and other reserve accounts. For example, Governor’s proposal would still mean:

• Investments in higher education would be sharply reduced;
• Voter-approved efforts to reduce class sizes in early grades and improve student achievement would be suspended;
• Temporary financial and medical assistance through GA-U for people who are unable to work due to disability would be sharply curtailed;.
• Thousands of working families would lose access to child care assistance;
• Mental health care funding for low-income residents would be further reduced;
• Many residents with long-term care needs would lose assistance with activities of daily living such as bathing, eating, and dressing;
• Low-income adults would lose hearing services, including hearing aids;
• School-based Medicaid services would be suspended;
• Programs that protect our air and water and clean up toxic spills would be cut;
• The waiting list for Basic Health, currently over 93,000, would continue to rise.

It’s important to remember that these cuts to Washington’s public structures would be on top of the $3.6 billion eliminated last year.  Another round of deep budget cuts this year would mean eliminating vital supports for working families.  Reducing investments in education and other areas that foster a healthy, competitive workforce would also undermine our economic recovery.

The Governor’s Proposed Tax Actions

The Governor’s proposal would generate $605 million in new resources by eliminating wasteful exemptions and loopholes, and by increasing taxes on unhealthy or environmentally-damaging substances.  Some of these actions are also included in HB 3176, which is currently under consideration in the State House of Representatives.    The table below summarizes the revenue enhancements included in the Governor’s proposal. Many of these options are also included in a list of revenue options compiled by the Budget & Policy Center.  This list contains a short description of each option.

Combining these proposals with last year's revenue actions, tax increases would account for barely seven percent of the total solution to an $11.7 billion deficit.

1. For more information see the schmudget post "What is 'Economic Nexus' and Why do I Care?"

2.  Does not include revenues related to the Dot Foods case.