Updated January 12, 2015
Senate Ways & Means Chair Andy Hill has released a budget analysis that turns a blind eye to our state’s revenue problems and fails to reflect the true needs of Washingtonians and our economy.
Responsible, non-ideological fiscal analysis bears out that we have a budget deficit. Hill’s budget analysis is a clear nod to a forthcoming budget proposal by the Senate.
The proposal incorrectly claims that new revenue is not needed in the upcoming budget cycle. Accepting this myth comes at a great cost- without new revenue, we can’t make needed (and in some cases, mandated) investments in education, health, and the economy. As we have shown, our resources will fall dramatically short of the amount we need to adequately fund schools, health care, child care, and other important investments in the next two years.
What’s the price we pay for failing to raise revenue and neglecting needed investments?
Cost of postponing progress on education funding: Delayed educational opportunities for over 1 million children and a bigger cost next biennium
Needed investment in 2015-17: At least $2 billion
Under the State Supreme Court’s ruling in the 2012 McCleary case, lawmakers are required to invest billions more in K-12 education in order to comply with our constitutional obligation to fully fund basic education. The legislature has repeatedly been chastised by the court for failing to make meaningful progress and is currently being held in contempt. Despite this court-ordered mandate, Senator Hill’s proposal would put off making progress on two important education reforms: providing full day kindergarten and lowering class sizes in grades K-3, which is estimated to cost about $520 million over the next two years to continue phasing-in implementation.
While the deadline for fully funding these reforms does not come due until the 2017-18 school year, delaying these investments denies opportunities for today’s children and simply kicks the can down the road. Additionally, the State Supreme Court has indicated that failing to make progress on basic education investments will likely trigger sanctions.
Voters also approved Initiative 1351, which will ultimately add over 25,000 school staff, including teachers, principals, counselors, librarians, grounds-keepers. The initiative is expected to cost $1.6 billion over the next two years, on top of the other McCleary-required education investments.
Cost of neglecting to fund mental health services: Putting the health and safety of Washingtonians in jeopardy
Needed investment in 2015-17: At least $65 million
Our mental health system fails to meet the needs of the most vulnerable Washingtonians, resulting in the warehousing of patients in hospital emergency rooms. Earlier this year, the State Supreme Court ruled that this practice is unconstitutional and is a practice that cannot continue in 2015. In spite of the urgency to meet the needs of those suffering from mental illness, Senator Hill’s proposal does not include additional funding and simply ignores this State Supreme Court ruling.
Cost of failing to invest in our state’s workforce: Compromising our ability to retain and attract skilled workers
Needed investment in 2015-17: Approximately $500 million
Public employees provide care for seniors, people with disabilities and children, help keep children safe from abuse and neglect, and educate our workforce. Most of these employees have not had a pay increase in seven years, and Senator Hill’s proposal puts off increases for at least an additional two years. While pay increases are not mandatory, delaying them any longer will adversely impact retention and the state’s ability to attract workers who provide important services that benefit all Washingtonians.
Cost of ignoring a failing revenue system that will only get worse: Billions of dollars in lost revenue that should be invested in Washingtonians
Needed reform in 2015-17: Enact a capital gains tax
Washington state fails to raise adequate resources due to our heavy reliance on a retail sales tax which cannot keep pace with our economy. As the graph shows, economic activity captured by the state’s sales tax is shrinking and will continue to do so unless we make significant changes. The Senate Ways and Means Chair ignores this reality while also pushing significant costs- for education, employee pay, and mental health- into the future. This simply does not add up. Additional revenue is needed to adequately invest in the things all Washingtonians care about- from education, to health care, to public safety. Enacting a capital gains tax, as Governor Inslee proposed in his budget, would significantly improve our ability to raise resources.
Cost of neglecting the needs of Washingtonians and our economy: PRICELESS
Buying into the myth that new revenue is not needed to adequately invest in our most important public priorities is harmful to our economy and to all of us. Without new revenue, we won’t be able to provide high quality early learning experiences for children, make college affordable, keep communities safe, or make other important investments that create a strong economy. New revenue is vital to a strong, thriving and prosperous Washington state.
