Session Ends; 800 Pound Revenue Gorilla Still in Room

The 2012 regular Legislative Session came to close last night, culminating in an unresolved debate over which budget proposal is more “sustainable." The truth is that neither the proposed House nor Senate budgets would adequately fund investments in education, health care, or other core public priorities – not now and not in the future.

Why? Because neither proposal addresses the single most important factor in building a truly sustainable state budget: fixing Washington’s flawed revenue system.

Washington’s excessive reliance on sales taxes means we have a tax system that simply cannot generate sufficient resources to maintain our existing commitments to a high-quality education system and safe, healthy communities. The graph below shows that our state sales tax has steadily lost capacity to generate tax revenues needed to support basic public services over the last 40 years.

This flawed system cannot be addressed with Initiative 1053 (I-1053) in place, however. I-1053 mandates that any tax increase can only be enacted via a supermajority (two-thirds) vote of the legislature or a vote of the people. The onerous supermajority requirement means that a minority of legislators can block action needed to preserve funding for essential public priorities.

The limitations  of I-1053 were prominently revealed last night when House Bill 2791 failed to pass out of the House of Representatives, even though a majority (51) of legislators voted to approve it. The bill would have eliminated a sales tax break for nonresident shoppers in order to provide additional funds to implement all-day kindergarten in Washington.

Today, the King County Superior Court is holding a hearing on whether I-1053 violates the state Constitution.  Whatever the Court decides, we will remain locked in an unsustainable cycle of slash and burn budgeting until we break free of Initiative 1053’s formula for minority rule.

The bottom line is that we cannot cut our way to a sustainable budget.  More cuts to our health, education, and other public structures would result in more damage to fragile economic recovery and the well-being of Washingtonians. Creating a truly sustainable state budget requires reforming our failing revenue system.