New Budget & Policy Center Brief Details Recent Revenue Actions

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New Budget & Policy Center Brief Details Recent Revenue Actions

By - May 13, 2010

A new Budget & Policy Center policy brief analyzes the major revenue measures adopted in 2009 and 2010. Five key findings are discussed in detail:

  • Revenue increases accounted for a very small share (8 percent) of the total actions taken to balance the state budget between fiscal year 2009 and fiscal year 2011. Policymakers relied much more heavily on one-time transfers and changes, federal recovery funds, and especially on making deep cuts in education, health care, and economic security.
  • Over one-third (35 percent) of revenue enhancements passed in 2009 and 2010 will not increase taxpayer liability compared to previous years. These actions include enhanced auditing and compliance efforts, technical clarifications, and other actions.
  • Most of the actual tax increases were temporary and will expire at the end of fiscal year 2013. The permanent measures – such as adopting economic nexus and eliminating wasteful exemptions and deductions – will make Washington’s tax structure more adequate and equitable in the long run.
  • Tax increases enacted in Washington increased revenues in the current biennium by about 3.6 percent – a level that is lower than the national average and solidly in the mainstream relative to other states. At least two-thirds of all states increased taxes to help maintain services during the recession.
  • These additional resources helped offset devastating cuts in services that further core public priorities – such as ensuring we have a highly educated and competitive workforce, that we maintain good public health, and that we live in safe communities.

Future schmudget posts will discuss these findings in greater detail.

The analysis also provides details of the individual revenue measures enacted in 2009 and 2010. To read the entire report, click here.

About Andy Nicholas, Senior Fellow

Andy specializes in state budget and tax policy. Since joining the Budget & Policy Center in 2009, he has served on a Legislative Task Force on Tax Preference Reform and has conducted numerous analyses of Washington state’s tax code.

Read more about Andy