Tax Reform Initiative Complements Recently-Passed Revenue Package
Our ability to continue making progress as a state on education, community, health, and economic security depends on both the short-term solution provided by the revenue package just passed by the legislature and a long-term roadmap like that provided by the tax reform initiative unveiled Wednesday.
The revenue package expected to be signed into law by Governor Gregoire on Friday is a necessary response to the Great Recession. The recession greatly increased the need for health care and other services while dramatically decreasing the revenue available to pay for those services. Working under existing restraints, the revenue package plugs holes in the state budget. It allows us to avoid even deeper budgets cuts that could have eliminated financial aid for thousands students, child care assistance for thousands of families, and health care supports for lower income mothers with at-risk pregnancies.
But while these revenue measures are necessary to meet the immediate crisis, they do not provide a roadmap on how to fund education and health care over the long- term; in fact, over 40 percent of the package is set to expire after three years.
Initiative 1077, officially announced Wednesday, is an attempt to provide that long-term roadmap. It does three things:
- Cut taxes by reducing the state property tax and eliminating the B&O tax for more small businesses.
- Create an income tax on high incomes (over $400,000 for couples, $200,000 for individuals).
- Dedicate the net revenue (an estimated $1 billion per year) to education and health care.
For more detail on I-1077, see EOI's new brief.
