Offering frequent news and analysis from the majestic Evergreen State and beyond, The Cascadia Advocate is the Northwest Progressive Institute's unconventional perspective on world, national, and local politics.

Monday, March 1, 2010

House Democrats release revenue proposal

It's been a long, pot-holed road to get to here, but with today's release of the House Democrats' revenue plan, the Washington legislature now has the tools it needs to create a supplemental state budget that will sustain core services.

The Senate released their plan last week. It focuses on three large revenue sources while the House proposal is an accumulation of five smaller measures. Both the House and the Senate plans would close tax loopholes and increase the state cigarette tax by one dollar per package. The House plan would raise less revenue, $760 million compared to the Senate’s $918 million, but it would take a little bit from more places. For instance, in addition to the cigarette tax and closing loopholes, the House plan also bumps up the business and occupation tax for certain service providers like lawyers and accountants, and borrows a bit of money from the lottery and transportation funds.

Where the two plans differ substantially is on sales tax. The House has proposed eliminating the state sales tax exemption on bottled water, custom software, candy, gum, plastic surgery and janitorial services. These changes wouldn't expire.

The Senate approach, House Bill 6875, is to raise the general sales tax by 0.3% for three years, and offset the impact to low-income families with a working families tax credit. More people would feel the impact of the Senate's sales tax plan than the House's and there would be no way for most people to avoid it.

The House's targeted sales taxes would create new revenue streams that could fund programs into the future. Each of its proposed taxes funds a logical program, for example, the proposed bottled water tax would fund environmental programs, and sales tax on candy and gum would fund low-income children’s health and dental care. Buy water, keep lakes clean. Buy gum, fix a cavity.

Due to last year’s basic education finance reform, lawmakers are already on the hook for finding more revenue for public schools. Under the House's proposal, money from closing tax loopholes, taxing janitorial services, and increasing the B&O tax on certain services could all funnel to our underfunded public schools. Right now these taxes would just maintain the status quo, but when the economy recovers, Washington schools could see a small increase in state funding.

Democratic legislators are taking a large political risk by raising taxes right now, but they've measured that risk against the option of leaving Washington's needy elderly, hungry and sick to suffer and die (yes die) under their watch, and they have done the right thing.


Blogger Sarajane46th said...

King County Democrats recommend that the Legislature raise twice as much revenue as the Governor does, or $1.4 billion. Instead, each house seems intent on mustering up something shy of $1 billion and cutting the rest of the $2.8 billion. This just leaves too many cuts to the safety net for our most vulnerable citizens. We believe that some people will become homeless and may die as a result of lack of housing and medical care.

Nonetheless, we congratulate the House and particularly Rep. Ross Hunter on coming up with a better and more humane set of options, rather than the much-despised and regressive sales tax increase. The Washington State Democrats at their January meeting passed a resolution that opposes any sales tax increase and asks that more tax loopholes be closed.

March 2, 2010 1:06 AM  

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