Why are lawmakers being shortsighted with community investments?

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Why are lawmakers being shortsighted with community investments?

Wrong-headed ‘austerity mindset’ won’t build a strong foundation for the future

By - April 18, 2019

When it comes to crafting the state budget, Washington state lawmakers should start by assessing what investments are needed in key areas like education, infrastructure, and physical and mental health care to ensure our communities will thrive in the years and decades ahead. From there, they should determine what adjustments they need to make to the state tax code to ensure there are sufficient resources and that everyone is chipping in to pay for the investments that benefit us all.

Yet budget writers in Olympia, especially in the state Senate, are stuck in a cycle of austerity. They are basing spending levels for the next two years on what was spent in the prior two years and on current, inadequate levels of revenue generated by our state’s deeply inequitable tax code – an approach that doesn’t actually align with community needs. This status-quo austerity mindset is pervasive and damaging. And the result is a state budget that underinvests in community needs and relies on artificial savings assumptions and budget gimmicks to balance, setting up a perpetual budget shortfall.

Our elected leaders can fund all the things that our communities need to thrive. It’s our outdated tax code that is failing to provide the resources they need to do so. That must be the focus of their budget discussions going forward.

Even in good economic times, legislators are too often inclined to only authorize increased spending in areas where courts have ordered additional investment or where there is a crisis. In the meantime, they tell advocates and constituents there isn’t enough money in the coffers to make more meaningful, necessary investments in things like preschool and affordable child care, community and technical colleges, and services to reduce homelessness and provide affordable housing.

Our elected leaders can fund all the things that our communities need to thrive. It’s our outdated tax code that is failing to provide the resources they need to do so. That must be the focus of their budget discussions going forward.

Over the coming days, budget writers plan to wrap up behind-the-scenes negotiations between the House and Senate spending plans. Both have set spending levels for the next two years below the Governor’s plan and far below community needs.

Between the House and Senate budget plans, the House plan is better because it includes additional reforms to our state’s inequitable tax code and is less reliant on artificial savings and budget gimmicks.

In the final plan, legislators must:

  • Reject unrealistic savings assumptions, like the Senate’s proposal to assume $119 million in savings from “efficiencies in state spending” (which are really just across-the-board reductions to state services) and more than $100 million from underfunding school employee health benefits. They must reject proposals in both budgets to divert funds intended for the Temporary Assistance for Needy Families Program to fund other parts of the budget. And they must not build a budget that balances as a result of hundreds of millions of dollars in artificial “program integrity” savings in the state Medicaid health care program.
  • Take meaningful steps to reform our upside-down state tax code, where low- and moderate-income people pay up to six times more of their income in state and local taxes than the wealthiest. This starts with closing the tax break on capital gains and other outdated tax exemptions.

It’s laudable that House and Senate leaders are looking at reforms to the tax code this year, including smartly closing the tax break on capital gains, removing tax breaks for travel agents and gold bullion, and making our real estate excise tax more progressive. But there is not yet agreement between the House and Senate to build these proposals into the final budget. All of these changes to the tax code are necessary to make sure the budget sets our state up for a prosperous and equitable future given the growth of our state population and increasing cost of living.

With less than two weeks to go in the legislative session, Washington lawmakers should stop relying on false savings assumptions and instead stand up for the investments needed that benefit us all. After all, that’s what we elected them to do.

About Misha Werschkul, Executive Director

As the leader of the Budget & Policy Center, Misha guides the organization’s strategic vision and ensures its position as a leading voice shaping the debate around budget priorities.

Read more about Misha