Budget Band-Aids: Kansas and Washington

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On Monday, Kansas Governor Mark Parkinson gave his State of the State speech, which included a proposal to temporarily increase the state sales tax by 1 percent to help fill a nearly $400 million budget shortfall. Governor Parkinson said, "I can't find $400 million that we can responsibly cut. If you can find responsible cuts, I'm open to looking at them. Let me repeat, as a person who is fiscally responsible, a person that has cut more money out of the Kansan budget than any Kansan in history, there isn't $400 million that we can responsibly cut."

Of course, lawmakers shouldn't forget the very good ideas floated by Secretary of Revenue Joan Wagnon. She has suggested a three-year moratorium on creating new sales tax exemptions and an examination of the effects of current sales tax exemptions. If enacted, her proposals would go a long way to both modernizing the state's tax structure and making it more stable. 

In Washington State there are fewer buttons to press when it comes to revenue raisers (because the state lacks a broad-based income tax), but one option that is available to lawmakers is to increase and modernize the state's sales tax.

This week the Washington Budget and Policy Center released a report on this very topic. It includes a proposal to temporarily increase the sales tax rate, enlarge the base to include consumer services, and include candy, gum, and bakery products in the sales tax base.

Governor Christine Gregoire's budget proposals are frankly disappointing compared to the proposal put forward by the Budget and Policy Center. The Governor's proposal includes offering tax incentives to businesses, closing tax loopholes, service cuts and using federal dollars to help balance the state's budget.

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