The new state budget is a Band-Aid approach that fails to raise the revenue needed to fully support education and rebuild Washington’s middle class. Lawmakers missed the chance to choose investments in the middle class over tax breaks for wealthy corporations. For example, they continue an ineffective tax break for high-tech corporations, instead of prioritizing those resources for kids and families.
While the budget does invest $1 billion in public schools it is balanced through a patchwork of short-term approaches (see graph) that are not a solution to meeting our long-term needs.
The budget cuts investments needed to provide opportunities to Washingtonians. While common sense investments are made in areas like early learning, public schools, dental care for adults, and making college affordable, overall the budget continues a four-year trend of cutting investments. For example:
- Cost of living salary increases for teachers are once again suspended to save $320 million.
- Training and other services for people who are looking for work or need help to keep their job were reduced by $162 million.
- Housing and essential need services for people with disabilities are reduced by $20 million.
The budget makes merely technical fixes to revenue collections. Adjustments to the way we collect tax revenue were made to avoid future revenue loss. These are important actions, but they do not generate new revenue to meet growing needs, they just keep us even:
- In response to a court ruling (Bracken v State), an estate tax loophole, which would have allowed married couples to avoid paying the tax, is eliminated, gaining $160 million
- To avoid a future lawsuit and potential loss of revenue, equity is established in the taxes paid by residential, wireless, and cable telephone services, raising $85 million
Steps were taken to secure federal funding. Lawmakers seized important opportunities to support the health and well-being of Washingtonians, while at the same time saving the state money:
- Expanding Medicaid means over 250,000 people will gain health coverage and the state will save $318 million from an increase in federal funds
- Renewal of the Hospital Safety Net Assessment will allow $272 million in federal matching funds to flow into the state
Transfers from other accounts paper over the failure to raise more revenue.
- Over $500 million is shifted from other purposes into the general fund, for example:
- Over $250 million is moved out of the Public Works Assistance Account, which funds important sewer, water and other infrastructure projects.
- More than $20 million is transferred from accounts that fund the cleanup of hazardous material in the environment.
The budget is most noteworthy for what’s not in it: sustainable revenue. Boosting our resources is necessary to rebuild our economy and fully fund basic education, estimated to cost $4.5 billion by 2018. Lawmakers could have invested more in opportunities for all Washingtonians, but instead they chose to preserve tax breaks for millionaires. For example, they could have ended the tax break for oil refineries and other major corporations and invested those resources in our kids’ education.