Washington State appears to have joined the majority of states with fiscal problems. According to the Center on Budget and Policy Priorities, over half of the states are expecting to face a budget shortfall in their FY09 budgets. Estimates are that Washington could face a budget shortfall for the 2009-2011 biennium of $2.5 billion. Governor Chris Gregoire has said that she's not interested in tax hikes. "I said it four years ago, I'll say it again now: The last thing you want to do is go for taxes when you've got an economic downturn." Instead she has asked state agencies to tighten their belts and identify ways to cut spending. Yet, during an economic downturn state services become even more important to those in need.
Washington has one of the most regressive tax structures in the country and relies more heavily on regressive sales and excise taxes compared to other states. Washington is one of only nine states without a broad-based income tax. Perhaps now is the time to consider restructuring the state's tax system. Lawmakers and advocates should spend a few minutes reading a series of fact sheets released this month by the Economic Opportunity Institute, which provide detailed prescriptions to Washington's tax policy problems. The fact sheets include information on changing the tax structure through implementing a tax on Washingtonians with high incomes, expanding the sales tax base, and closing tax loopholes.
Clearly there are some in Washington, namely anti-tax zealot Tim Eyman, who prefer gimmicks over real solutions. This week Mr. Eyman's initiative to curb traffic congestion received approval from the Secretary of State's office. The proposal will be placed on the November ballot and would further constrain the state budget by taking 15 percent of the sales and use tax on vehicles and devoting the revenue to ease traffic congestion. The initiative would mandate that high occupancy vehicle lanes are open longer hours, stop lights are synchronized, and increased funding is available for road side assistance. While nobody likes traffic congestion, this is not the sort of problem that should be solved through a ballot initiative that will permanently put congestion reduction first in the queue for funding. Mr. Eyman's proposal would constrain the budget without offering solutions to the larger issues facing residents.