As policymakers grapple with a State Supreme Court mandate to invest billions of additional funds in Washington state schools, today’s lackluster forecast of state tax collections makes it abundantly clear that policymakers must get serious about reforming the state’s flawed, 1930s era revenue system. We cannot provide a prosperous future for our children and grandchildren unless we change our tax system.
Washington state tax collections are now estimated to grow by 2.8 percent in the budget year that begins in July, and by 4.6 percent and 4.5 percent in each of the two following years, according to updated projections released this afternoon by the state Economic and Revenue Forecast Council (ERFC).
In the next two-year budget cycle, resources will fall more than $2.5 billion short of projected spending on health and human services, environmental protections, higher education, early learning, and other key investments, as well as the next installment required to improve basic education under the State Supreme Court’s McCleary decision (see graph). (1)
The updated projections should come as a sobering reality check for some policymakers who have relied on unrealistic revenue growth expectations to dodge tough decisions about Washington state’s future. Earlier this year, these lawmakers put forward a damaging proposal to devote two-thirds of all future revenue growth to education. The proposal dubiously assumed that future revenue growth would be sufficient to fund court-mandated school improvements, which, by 2018 will cost at least $4.5 billion per budget cycle plus $1 billion for teacher compensation.
In reality, revenue growth won’t come anywhere close to meeting the needs of our state in the coming years. And we can’t afford to undermine the goals of the McCleary ruling by cutting deep into health care, child care, public safety, and other services that help kids succeed in the classroom. Today’s projections show that the widening gap between available tax resources and needed investments that promote a strong state economy can only be addressed by bolstering state resources.
(1) Projected additional spending needs estimated by the Office of Financial Management in communication sent via DSHS, June 3, 2014.