Our Executive Director Remy Trupin released a statement following the passage of the Senate budget. "Budgets are all about choices. Instead of choosing to make investments that would have reduced class sizes, made sure that working parents have child care, and increased access to housing and healthcare, the Senate chose to protect tax breaks for oil refineries, luxury car trade- ins, and a tax break for out of state shoppers. Not only did they fail to close even one tax break, they chose to pass 13 new ones."
A new policy brief, "Revenue Trends 1.1: Grow the Economy, Create Jobs, and Protect the Middle Class with New Revenue," is out today. Written by policy analysts Andy Nicholas, Michael Mitchell, and Elena Hernandez, Revenue Trends examines the March 2013 revenue forecast from the state Economic and Revenue Forecast Council (ERFC) and what it means for our state's tax system.
Among the findings:
- State tax resources will be $2.7 billion short of needs in the coming budget cycle
- Tax collections will remain far below adequate levels
- Washington state trails the nation in revenue recovery
- Our antique revenue system will prevent a full economic recovery
Instead of providing fuel for our economy, the Senate budget siphons off resources from families who need it the most, and takes a short-cut on court ordered investments in public schools. This approach is a dead end.
Check out our new infographic on the impact of the proposed Senate budget. Click on image below to enlarge.
Not only does today’s budget proposal from the Senate fail to close a single wasteful tax break to help maintain funding for schools, health care, and other important priorities, it deepens state spending on tax breaks, creating 13 new ones.
These new tax breaks will drain available resources by an additional $11 million in the coming 2013-15 budget cycle. Notable highlights include (see full list below):
- A sales tax exemption on the purchase of clay targets by non-profit gun clubs ($29 thousand);
- A sales and use tax exemption for the sale of financial information to qualifying international investment management firms ($747 thousand);
- A sales tax exemption on cover charges for dance clubs ($892 thousand).
At a time when existing state tax resources are projected to fall $2.6 billion short of the amount needed to sustain existing investments and fund court-ordered improvements to Washington state’s education system, it is irresponsible for policymakers create new tax breaks.
Instead, the Senate should follow Governor Inslee’s lead, who, just last week proposed eliminating more than $500 million in wasteful tax breaks to build a stronger education system for Washington state’s children.
Stay tuned to schmudget for additional analysis on the Senate budget.
The budget proposal released today by the Senate would hurt our ability to create jobs and grow the middle class. Instead of providing much-needed revenue to invest in our workforce, health, and environment, the proposal strips resources away from those who need it the most and lays a broken foundation for prosperity.
The Senate chooses to preserve unessential tax breaks instead of investing in the ingredients that will create and sustain middle class jobs (see graph).
Dismantles opportunities for families to get ahead
Opportunities that built a strong middle class such as access to job support, housing, and child care, are reduced under the Senate proposal:
- 4,000 fewer families will be able to access child care support;
- Those most affected by the economic downturn will be impacted by a $183 million cut to WorkFirst, our state’s program that helps people find and keep a job;
- People with disabilities will have less access to housing, essential needs, and economic assistance;
- People with low-incomes will be limited in their ability to afford health care due to required cost-sharing;
- Fewer people will receive transitional housing services and have access to shelters.
Education plan would force big cuts and harm our economy
The Senate’s solution to addressing our long-term obligation to fund basic education is to deprive all the other needs of Washingtonians. Along with their two-year budget proposal, they put forward a plan (SB 5895) to restrict growth in all non-education areas of the budget- that means less funding for health care, public safety, and a clean environment.
If this sounds familiar it’s because it closely resembles a flawed proposal by gubernatorial candidate Rob McKenna. As we wrote about then, this type of approach equates to cuts that damage our ability to recover from economic downturns, eliminates jobs, and threatens the health and safety of Washingtonians. For more analysis of the McKenna proposal see our posts here and here.
The final budget must include enough resources to maintain our current obligations to health, safety and strong families, while also meeting the needs of our future economy and our constitutional obligation to invest in public schools.
Coming soon- More analysis on investments towards McCleary and other components of the Senate proposal.
Our Executive Director Remy Trupin released a statement this morning on the Senate budget. Read it here.
Executive Director Remy Trupin released a statement in response to the Senate's budget proposal.
"“The Senate budget released this afternoon is a disturbing proposal that makes one bad choice after another. It should not be the floor or the ceiling in the budget debate.
By sweeping all other areas of the budget, this plan will hurt Washington state’s economic recovery and our ability to create middle class jobs. It bets against our future through robbing investments in health, public safety, and family security. It is a bad deal for all Washingtonians.”
Policymakers must address Washington state’s dependency on tax breaks and enact policies that encourage transparency and accountability.
Senate Bill 5843 is a start – requiring that many newly enacted tax breaks include clear accountability measures – but it does not address the lack of oversight of the 640 tax breaks already in law.
To learn more about the 640 tax breaks currently on the books, and what we can do to shine light on our tax code, check out our latest infographic (click to expand).