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State Revenue Forecast Doesn’t Change the Facts: Washington State Needs Equitable New Revenue

Posted by Kelli Smith at Jun 20, 2017 01:45 PM |
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Statement from the Washington State Budget & Policy Center:
The updated state revenue forecast, which projects a small increase in the amount of tax resources available to fund schools and other priorities in the coming years, should signal to lawmakers that it’s time to get to work on cleaning up the state’s flawed tax code. Failing to do so would make it impossible for lawmakers to amply fund schools without forcing harmful cuts to health care, higher education, and other investments that promote a strong state economy and thriving communities.

Lawmakers in Olympia have until June 30 – just 10 more days – to finalize the state budget before state agencies are forced to begin shutdown procedures. A state government shutdown would put thousands of Washingtonians at risk of losing access to child care, public health resources, and job supports, and it could cause interruptions to business, environmental protection, and utility services. That’s not even to mention the loss of income for state workers during the shutdown.

With the latest revenue forecast, lawmakers now have all the information they need to come to an agreement on a budget that invests in strong communities. The Washington State Economic and Revenue Forecast Council’s final revenue forecast for the fiscal year (which ends on June 30) projects state tax revenues will increase over the next two years by just $80 million (less than 0.2 percent of the current budget) relative to the previous forecast – a mere blip on the state budget radar. 

In the past few years, lawmakers in Washington state have passively relied on revenue growth from the shaky economic recovery in order to make sluggish progress toward fully funding schools, per the state Supreme Court’s McCleary mandate. This approach has been both inadequate – the legislature is currently being held in contempt for failing to fully fund schools – and irresponsible, since most or all of the revenue growth will vanish when the next recession strikes. Today’s inconsequential revenue projection doesn’t change that.

As we wrote after the last revenue forecast in March, when adjusted for economic growth, state revenues have actually declined since 2001 and have remained nearly flat since the end of the last recession. This means Washington state is still funding many programs and agencies at levels far below what is necessary to serve our communities. Negligible growth in revenues is not enough to maintain current obligations, let alone enough to provide for stronger investments that help our state thrive. 

Lawmakers must take this opportunity to enact smart, long-term reforms by raising new revenue from equitable, sustainable, and adequate sources. They can start by closing wasteful tax breaks for corporations and by eliminating the tax break on high-end capital gains. Doing so would improve the wellbeing of our state and its people for generations to come, and begin to turn our upside-down tax code right-side up.


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