Not your older brother's recession
Washington state desperately needs additional public resources in order to create jobs and rebuild our state economy. Unless policymakers work swiftly to increase revenues by eliminating wasteful tax breaks or increasing general tax rates, public resources will remain critically below minimally adequate levels for the foreseeable future.
As the graph above shows, state tax revenues for fiscal year 2011 -- four years after the start of the Great Recession – were 14 percent below 2007 levels, after adjustment for inflation. By 2014, fully six years since the start of the current recession, revenues are projected to remain about 10 percent below pre-recession levels. By contrast, during the previous “Dot Com Burst Recession” of the early 2000s, revenues had fully recovered to pre-recession levels after only three years. After six years they were a robust 16 percent higher than they were in 2001.
This is not a typical recession. It is time to get serious about creating jobs and restoring prosperity for everyone in Washington state. Doing so will require smart investments in our state health, education, and other public structures . But we can’t make such investments without additional resources, which can be generated by modestly increasing state tax rates, eliminating unproductive tax breaks, or both.