NPI's Cascadia Advocate

Offering commentary and analysis from Washington, Oregon, and Idaho, The Cascadia Advocate is the Northwest Progressive Institute's unconventional perspective on world, national, and local politics.

Wednesday, June 17th, 2015

Everything you need to know about a state government shutdown

Judg­ing by the news today, the pub­lic is start­ing to become aware of the pos­si­bil­i­ty that Repub­li­can intran­si­gence over the bud­get could cause a shut­down of the Wash­ing­ton state gov­ern­ment. If a bud­get isn’t approved by June 30, then start­ing on July 1, many state gov­ern­ment oper­a­tions will slow or cease.

As a pub­lic ser­vice, the North­west Pro­gres­sive Insti­tute has put togeth­er this overview of a state gov­ern­ment shut down: how we got here and how we can avoid it.

What hap­pens if the state gov­ern­ment shuts down?

Accord­ing to the AP, a bunch of work­ers don’t get paid and a bunch of pub­lic ser­vices shut down:

Under the gov­ern­ment shut­down con­tin­gency plan that is cur­rent­ly on the Office of Finan­cial Man­age­men­t’s web­site, all of the state’s uni­ver­si­ties and com­mu­ni­ty col­leges would remain open. But agen­cies like the Liquor Con­trol Board, state parks and state Lot­tery would face a com­plete shut­down, while oth­ers like the gov­er­nor’s office, the Depart­ment of Social & Health Ser­vices, and Depart­ment of Cor­rec­tions would face a par­tial shut­down. Among those offices that would remain open are the Depart­ment of Trans­porta­tion, the Traf­fic Safe­ty Com­mis­sion and the Office of the Trea­sur­er.

That sounds ter­ri­ble. Why would the state gov­ern­ment shut down?

The short answer: Repub­li­cans want to pro­tect the rich from being taxed to pay for pub­lic schools.

The long answer: it’s pret­ty much the same as what hap­pened in Con­gress in Octo­ber 2013, when the fed­er­al gov­ern­ment did indeed shut down for three weeks. At the time, Repub­li­cans held only one of the two hous­es of Con­gress — the House of Rep­re­sen­ta­tives — and Democ­rats held the Sen­ate and the White House. House Repub­li­cans demand­ed that Democ­rats agree to defund Oba­macare. Democ­rats and Pres­i­dent Oba­ma refused, and the Repub­li­cans even­tu­al­ly caved.

Here in Wash­ing­ton State, Repub­li­cans have a nar­row two-seat major­i­ty in the State Sen­ate, and Democ­rats con­trol the House of Rep­re­sen­ta­tives and the Gov­er­nor’s office. Gov­er­nor Inslee and House Democ­rats agree on all the basic points of a new bud­get. Repub­li­cans in the State Sen­ate do not.

What are they argu­ing about?

There are sev­er­al points of dis­agree­ment between Democ­rats and Sen­ate Repub­li­cans, but the biggest one by far is Gov­er­nor Inslee’s pro­pos­al to tax the invest­ment income (also known as a cap­i­tal gains tax) of the wealth­i­est 32,000 res­i­dents of Wash­ing­ton State to help add more mon­ey for pub­lic edu­ca­tion. Gov­er­nor Inslee and House Democ­rats have moved toward a com­pro­mise on sev­er­al oth­er issues, includ­ing drop­ping for this year a pro­posed cap-and-trade sys­tem to reduce car­bon emis­sions. The gov­er­nor and House Democ­rats sup­port the cap­i­tal gains tax. Sen­ate Repub­li­cans adamant­ly oppose it.

A cap­i­tal gains tax for pub­lic schools sounds con­tro­ver­sial. Does the pub­lic sup­port it?

They sure do. A poll done in Jan­u­ary showed 57% of vot­ers sup­port Gov. Inslee’s cap­i­tal gains tax.

News­pa­per edi­to­r­i­al boards across the state have gone on record in sup­port of the cap­i­tal gains tax, includ­ing The Olympian and the Seat­tle Times.

Wait, what was that last part? The rabid­ly anti-tax Seat­tle Times sup­ports the cap­i­tal gains tax?

Shock­ing­ly, yes. Here’s what they said about it last week­end:

A long-term solu­tion to the edu­ca­tion-fund­ing cri­sis in Wash­ing­ton is right in front of law­mak­ers.

Instead of punt­ing to com­mit­tees and next year’s Leg­is­la­ture, they should buck­le down and make the choice to begin tax­ing cap­i­tal gains.

A cap­i­tal-gains tax, with iron­clad lim­i­ta­tions to pre­vent it from being used for any­thing oth­er than edu­ca­tion, is a more palat­able option. Cap­i­tal-gains tax­es are com­mon — all but nine states have them, accord­ing to the Tax Foun­da­tion.

When even the Seat­tle Times agrees that a cap­i­tal gains tax is need­ed, then it’s time for Repub­li­cans to give up and accept real­i­ty. Espe­cial­ly those sub­ur­ban Sen­ate Repub­li­cans like Steve Lit­zow or Andy Hill who are rumored to be run­ning for gov­er­nor in 2016.

So basi­cal­ly, Repub­li­cans are will­ing to shut down the state gov­ern­ment to pro­tect the rich from being taxed to pay for pub­lic schools?

Exact­ly.

What do we do now?

Sim­ple: demand Sen­ate Repub­li­cans accept a cap­i­tal gains tax to pay for pub­lic schools. That’s it. No strings attached, no “we’ll give you your cap­i­tal gains tax if you give us some crazy right-wing thing we’ve always want­ed.” Tax the rich to fund our schools, get this bud­get done, and stop a shut­down from hap­pen­ing. Make the State Sen­ate Repub­li­cans cave to pub­lic pres­sure just like John Boehn­er and Repub­li­cans in Con­gress caved to pub­lic pres­sure in the Octo­ber 2013 shut­down.

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6 Comments

  1. I think you have mis­rep­re­sent­ed the main rea­son by say­ing that Repub­li­cans are will­ing to shut down the gov­ern­ment to pro­tect the rich. Every­body should do their part — to pay into the things that are impor­tant to them. Of course the pub­lic is in favor because that same major­i­ty would not be impact­ed by this capi­tol gains tax. But that major­i­ty could sac­ri­fice their android phones, month­ly car pay­ments, boat adn jet skis and insur­ance, cable TV pack­ages and flatscreens for the ben­e­fit of pub­lic edu­ca­tion could­n’t they?

    # by Larry Dominguez :: June 19th, 2015 at 10:03 PM
  2. Lar­ry makes a good point. Of course peo­ple would be in favor of a tax they don’t have to pay.

    The real prob­lem is that Cap­i­tal Gains tax rev­enue is extreme­ly volatile. We should not rely on a rev­enue stream that can fluc­tu­ate wild­ly from year-to-year based on both the mar­ket’s volatil­i­ty and the whim of investors; at least not for some­thing as crit­i­cal as basic edu­ca­tion.

    # by Jason Alvarado :: June 22nd, 2015 at 12:40 PM
  3. Lar­ry you seem to for­get that we do sup­port edu­ca­tion with prop­er­ty tax­es. And you seem to for­get that our gov­er­nor gave Boe­ing a $9 bil­lion tax cred­it. Maybe he could cut some of that cred­it and there would be no need for a cap­i­tal gains tax.

    # by dsentor :: June 25th, 2015 at 10:57 AM
  4. Shut down the Lot­tery? Did­n’t that mon­ey sup­port edu­ca­tion? That is what we were all told by the media.

    # by Patrick Ray :: June 28th, 2015 at 9:28 PM
  5. Cut the bud­get! From the com­ments above we pay prop­er­ty tax­es to sup­port edu­ca­tion, we have mon­ey com­ing from the State Lot­tery for edu­ca­tion How much mon­ey does edu­ca­tion need? Live with­in your means. As a retiree I have no choice. My income is fixed. Par­ti­san pol­i­tics has no bear­ing on this issue.

    # by Patrick Ray :: June 29th, 2015 at 12:25 PM
    • Patrick, “cut the bud­get” is a mean­ing­less and coun­ter­pro­duc­tive slo­gan — unless you tell us what it is you want to cut. So is “live with­in your means”. If peo­ple and busi­ness­es real­ly lived with­in their means, then they would­n’t take out loans to buy hous­es and cars or use cred­it cards to start up busi­ness­es. But this hap­pens all the time.

      Like­wise, we as a peo­ple (we the peo­ple are the gov­ern­ment) bor­row mon­ey to get things done. We’ve been doing it since before this coun­try was a coun­try.

      Due to infla­tion, pop­u­la­tion growth, and new devel­op­ment, demand for essen­tial pub­lic ser­vices is con­tin­u­al­ly out­strip­ping the rev­enue avail­able to pro­vide those ser­vices. That’s why the Leg­is­la­ture is in its third spe­cial ses­sion: it’s under­fund­ed our schools so bad­ly that it’s in con­tempt of the Supreme Court, and is try­ing to reach an agree­ment on a bud­get the Court won’t deem total­ly inad­e­quate.

      # by Andrew :: June 29th, 2015 at 6:34 PM