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Senate Budget Still Scraping By, Not Considering Long View

Posted by Kim Justice at May 28, 2015 05:25 PM |
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The Senate’s latest budget plan cashes in on the most recent uptick in forecasted revenues, investing $242 million more to give workers a raise, maintain parks, and reverse proposed cuts to mental health services and health care for retirees. While these incremental steps move us closer toward becoming the kind of thriving state we want to live in, the Senate’s continued refusal to raise new revenue still misses the long view. It jeopardizes our ability to sustain these investments over time. 

With looming deadlines to finalize a budget that directs state investments over the next two years, it’s easy for lawmakers to lose sight of the big picture. Budget deliberations become centered on meeting court orders, complying with state and federal obligations, and adhering to basic budgeting principles – like making sure the budget balances.

This short-sighted mindset overlooks the bigger questions decision-makers should be focused on: Are children entering kindergarten with the skills they need to succeed throughout school? Is economic growth strong and shared with workers? Is Washington state’s tax system equitable, dependable, and stable?

When we look at the answers to these questions, the results leave a lot of room for improvement. According to our recent Progress Index, the state of the state is not the picture we want to see. On nearly half of 100 indicators of progress, we are stalled or going backwards. Consider the following:

  • Only forty-one percent of 3- and 4-year-olds (four of every 10) are enrolled in preschool.
  • Income inequality remains historically high in Washington state, with nearly one quarter (23 percent) of all income being held by the richest 1 percent.
  • The share of people with low incomes who do not have enough income to meet basic needs has increased, now encompassing nearly one-third of all Washingtonians (31 percent).
  • Washington state’s tax system has been falling behind the changing economy for decades. Between 2000 and 2014, tax revenues as a share of state personal income declined by 20 percent (see graph).

sales tax

Our budget must look to the future and take steps to ensure that we are reversing these negative trends. In order for Washington to move forward as a state, it must make robust investments in our kids, the environment, students, workers, and our most vulnerable Washingtonians. Doing so would benefit all Washingtonians. But making these investments and sustaining them for years to come is not possible without new revenue. Cobbling together a patchwork of one-time fund transfers and short-term resources, as the Senate budget does, is not responsible and will not move us toward the future we all want to live in.

While it’s certainly good news that we have more revenue than expected, scraping by with just enough over two years is missing the point that our state budget is supposed to be a tool to promote long-term economic development that benefits everyone.  A forward-thinking solution is to enact a modest capital gains tax and close wasteful tax breaks, as the House proposes

 

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