October 27, 2011
CONTACT: Anne Martens
BALANCE BUDGET BY ENDING TAX BREAKS AND RAISING REVENUE
Coalition calls on lawmakers to cut corporate welfare
instead of cutting our jobs and our families
In response to Governor Gregoire’s report on the devastation expected from another $2 billion in state budget cuts, members of the Our Economic Future coalition are asking lawmakers to stand up for Washington families by ending unfair tax breaks and raising revenue. (People affected by the cuts will be available for comment outside the Governor’s office in Olympia between 10am and noon)
“It’s not fair to balance the budget on the backs of the most vulnerable. These cuts hit hardest on those most at risk and set our state down a path of deepening poverty and increased homelessness,” said Rachael Myers (206-442-9455) of the Washington LowIncome Housing Alliance.
“More cuts add insult to injury,” said Jon Gould (206-324-0340 x 19) of the Children’s Alliance. “With 58,000 more children in poverty in our state – enough to fill 2,320 classrooms – these cuts couldn’t come at a worse time for our state’s kids.”
During the last legislative session, the coalition pushed for eliminating tax breaks like the ones that benefit out-of-state banks and private jet owners. Since regular session ended, both an official legislative audit committee and a citizen’s committee agreed that Washington hands out too much corporate welfare in the form of tax breaks, and that many of those loopholes should be closed.
Two-thirds of legislators would have to work together in order to close any tax loopholes. Because such cooperation is considered unlikely, the coalition may ask for a referendum to the people.
“We are the 99 percent,”said Anne Martens, spokesperson for the coalition. “Are tax breaks for big banks more important than our children’s future? Most people would say no.”
Coming on top of the $10 billion that has already been slashed from our public services, this latest round of cuts will have devastating effects on Washington families and on our ability to recover from the recession.
“Child care providers like me make sure that parents can go to work,” said Kathy Yasi, a small business owner and SEIU925 member. “Cutting programs like Working Connections forces parents to give up their jobs and pushes them to rely even more on public programs. It’s backwards.”
While slashing public services appears to save money in the short-run, in fact it adds to the rolls of people who need those services, at a time when both our families and our public services are already overstretched.
“Everyone feels the effects of this economic crisis, but some of our neighbors—particularly children of color–feel it worse. Lawmakers need to take a balanced approach to the state budget, with a plan for revenue, to make sure our families can survive this economic crisis,” said Mr. Gould.
“It’s time to find revenue solutions if we want to make sure that parents can continue to work and rebuild our economy,” said Ms. Yasi.
People all over Washington are finding it harder and harder to get services or support because prior budget cuts have already closed health clinics, raised tuition, and cut off access to job training, environmental protection and public safety. With few good jobs and an economy still designed to benefit special interests, these service cuts are hitting hardest on those least able to afford it.
Peter Sanderson, a community mental health therapist and SEIU1199NW member, agreed. “So many of the youth I see have lost their mental health care already, and many have become homeless after trying to make it on their own. They are trying so hard to create a positive future, but we leave them on the street. In this kind of economy, we should be investing in programs that help people get back on their feet instead of cutting help when they need it most.”
Ms. Myers notes that, “thousands of families are sleeping on the streets every night and people who never thought they’d need help with housing are now facing the reality that they can’t make ends meet.”
Randy Revelle (206-216-2515) of the Washington State Hospital Association adds that, “these cuts will be felt for years to come. People with serious disabilities and mental illnesses will lose their health coverage. People living with diabetes, congestive heart failure, and psychosis will lose coverage for essential medications. Rural areas could lose all access to obstetrical services, ambulances, and inpatient hospital care. The impacts are staggering.”
An additional $2 billion in cuts could mean:
· Tuition at community colleges and four-year universities goes up even more.
· More teachers are laid off and Washington moves towards the biggest class sizes in the nation.
· All community health clinics will be closed.
· 18,000 home care workers lose their jobs, and the elderly and disabled they care for lose their care and their homes.
· 7,400 criminals are put back on the streets with no supervision.
· 55,000 people lose their alcohol and substance prevention treatment.
· 80,000 people lose their mental health, long-term care and disability services.
While ending unfair tax breaks would not fill our gaping budget hole, it would ward off the worst of the cuts and provide sparse public services for the most vulnerable among us.
In order to really invest in schools, colleges, small businesses and public services that support a strong economy, we need to have a serious discussion about raising revenue.
The Our Economic Future Coalition represents more than 150 organizations concerned about deep budget cuts to core services. The Coalition is calling on lawmakers to find a more responsible and balanced approach to closing the current budget gap that includes closing tax loopholes and identifying new sources of revenue. www.oureconomicfuture.org.
Advocates should be loud and assertive about the need to raise revenues. Governor Gregoire has said she would raise only $700 million of the deficit, about one-third in revenues, and balance the rest with cuts to essential services.
The King County Democrats take the position that we should raise two-thirds in revenues and cut one-third in services. The amount of the revenue goal will determine what kind of revenues are considered. It will be less painful to vote for a few large taxes than many small ones.The Governor has said she wants to address tax breaks. I suggest the legislature start with the largest non-performing tax break. That would be Boeing’s 2003 $3.2 billion (over 20 years) for promising 1,200 additional jobs. Instead, last year alone they laid off over 10,000.
The Seattle Times on Sunday Jan. 4th ran an article about other states rescinding their nonperforming tax breaks and demanding refunds, or “clawbacks.” We want to see that here, too. We don’t appreciate being played for fools.
Extending the sales tax to all services, not just professional services, would do the most to fill the deficit gap. It would also be, in effect, progressive tax, since low-income people tend to hire few lawyers, accountants and financial advisers. I’ll bet most moderate-income people would prefer to pay sales tax on haircuts, rather than see 65,000 people lose Basic Health plans. According to the Rebuilding our Economic Future Coalition, a recent poll showed that–after hearing how deep the cuts in services would be–65% of Washingtonians supported increasing revenues.
Legislators should also use this crisis as an opportunity to take needed steps toward an income tax for high-earners, couples making over $500,000. This 1% tax would be constitutional if Washington law defined income as different from property. Sens. Adam Kline and Rosa Franklin’s SJB 8205 addresses this and should be given an early hearing.
Most of all, Democrats should take courage, and note that Seattle passed the Seattle Housing Levy in a time of economic downturn by its biggest margin ever, 68%. Trust the voters to know that you’re doing the right thing.
(This post first appeared as a comment on the Northwest Progressive Institute blog.)
The State of Washington is facing an additional $2.6 billion shortfall in revenue for the remainder of the current biannual budget cycle. Critical state services will be cut unless tax revisions and proposals to raise new revenue are adopted by the Washington State Legislature.
Below is a copy of a just received press release regarding a proposal already adopted by a number of other states – namely raise the tax on tobacco products which contribute to health care costs in the state. Legislators should support this measure as a reasonable alternative to further budget cuts and further loss of vital state services.
Representative Cody Sponsors Bill to Increase Tobacco Tax
Health Care Committee Chair aims for $88 million in revenue and decline in smoking rates
Olympia – Representative Eileen Cody (D – West Seattle), chair of the House Health Care and Wellness committee, has prefiled a bill for the 2010 legislative session to increase the tax on cigarettes by $1 and raise additional taxes on other tobacco products.
“Studies show that an increase in tobacco taxes will help kids stop smoking and may even prevent them from starting in the first in the place,” says Cody, a nurse who has made public health a priority during her tenure in the Legislature.
“At a time when our state faces a $2.8 billion budget shortfall, we desperately need additional revenue,” she continued. “Taxing tobacco makes sense: we save lives and millions of dollars in health care costs and help balance the state budget.”
House Bill 2493 would increase the cigarette tax by $1.00 and close tax loopholes, bringing tax rates on other tobacco products to parallel levels. The proposal would raise annual state revenues by at least $88 million. Of that, $19 million would be used to fund programs that help smokers quit and keep kids from ever starting to smoke.
A coalition of health organizations attempted to pass a similar measure last year, but it was limited to cigarettes and the revenue was more targeted to cessation programs. This year, many lawmakers as well as anti-tobacco use advocates believe there are few health care services and programs that can withstand additional cuts and are more willing to consider taxes and a broader application of the revenue.
The inclusion of smokeless products in this year’s bill — including deceptively marketed fruit-flavored products in bright packaging– reflects a growing fear that tobacco companies are taking advantage cuts in tobacco prevention programs across the nation to ramp up their marketing to children. Raising the cost of products and protecting funding for cessation and education programs is one effective way to protect youth from starting to use tobacco products.
Additionally, there is growing public support for these taxes here in Washington State. According to a recent survey, 70% of registered voters in Washington favor raising taxes on tobacco products.
“The tobacco industry is getting more clever at marketing to kids. On a recent trip to the store, I found apple and peach-flavored chewing tobacco and blackberry-flavored cigars. These products are obviously targeted at youth,” said Erin Dziedzic, Washington State Government Relations Director for American Cancer Society Cancer Action Network (ACS CAN).
”We know that raising taxes on smokeless tobacco, as well as cigarettes, will mean a drop in use especially among youth and young adults. For example, one study found that a 10 percent increase in smokeless tobacco prices reduces male youth consumption by 5.9 percent, with two-thirds of that reduction coming from kids stopping any use of smokeless tobacco at all,” said Lucy Culp, Washington Government Affairs Director for American Heart Association.
For Immediate Release: January 5, 2010
Contact: Erin Dziedzic, American Cancer Society Cancer Action Network, 425-466-5177
Lucy Culp, American Heart Association, 360-870-4016
Representative Brendan Williams speaks out in his latest Legislative Update about the need to “invest” in our state. He argues that we can’t keep cutting our state budget without killing the economic engine driving Washington State’s future.
Watch here and urge your state Legislator to also step up, speak out and act to fund needed public services in the upcoming Legislative session starting in January. The current state revenue forecast points to another $2.6 to $2.7 billion shortfall next year from the previously approved budget. You can contact your legislator by going to www.leg.wa.gov.
Bad news for Washington State continues as declining tax revenues now put the state budget deficit at $2.6 billion. The November forecast by the Washington State Economic and Revenue Forecast Council projected an additional decrease of $760 million in revenue over the previous forecast.
This $2.6 billion deficit is the decrease in revenue projected through June 30, 2011 of the current biennial budget cycle. In a press release from the State Office of Financial Management Governor Chris Gregoire comments that:
“Since the Legislature left in April, our revenues have continued to decline …. Our projected shortfall for the remainder of the biennium is an additional $2.6 billion, for a total gap this two-year budget period of $11.6 billion. That’s almost a third of our last budget. We have not seen a shortfall like this in 80 years.”
In a transcript of comments by Governor Gregoire posted on NPI Advocate, Gregoire stresses the seriousness and severity of the shortfall and states that:
“An all cuts budget is not the value of the people of the State of Washington. We must step up, do our responsibility to this State, and look for revenue to get the job done.”
This will not be an east task. First off the Legislature will have to repeal Tim Eyman’s I-960 which requires the Legislature to pass by a 2/3 vote any tax or revenue increase or put it to a vote of the people. . Under I-960 Eyman also required that the repeal of any existing tax exemption also required a 2/3 vote of the Legislature or a vote of the people. The Legislature needs to step up and do this. The rejection of Eyman’s I-1033 should give Legislators the needed courage to act to address the state’s budget needs as voters overwhelming rejected Eyman’s budget freeze proposal.
The Legislature has rested any real tax reform for years. We have a regressive tax structure on the state level that relies heavily on sales taxes. Last year some 54% of state tax revenue came from sales taxes. But as noted by Dr Arun Rahna in the press release from the Office of Financial Management:
“State revenues suffer when consumers hold back. The change in the revenue forecast is due mainly to a revised estimate of when households will regain the confidence to spend on the goods and services taat are subject to state taxes.”
Meanwhile Washington State is 1 of only 7 states that do not have an income tax. Yet the conservative Tax Foundation says that we rank 8th highest in the country in terms of income per capita.
As a result we have once again been ranked as the most regressive states in the nation in terms of our state and local tax structure. In the November 2009 Report by the Institute for Taxation and Economic Policy entitled “Who Pays? A Distributional Analysis of the Tax Systems in all 50 States“, Washington State is rated as the most regressive state in the country.
As quoted on the Seattle PI blog Strange Bedfellows:
“The lack of a progressive income tax to offset regressive sales and excise taxes, as well as property taxes, is the most important factor in making the Washington tax system so regressive. Taxes ought to be based on people’s ability to pay them, which means that the share of income paid in tax should rise as income grows, not fall sharply as is the case in Washington,” said Matthew Gardner, executive director of the Institute for Taxation and Economic Policy and the report’s lead author.
As the “Who Pays?” Report notes, in Washington State, the poorest 20% of non-elderly taxpayers pay 17.3% of their income in taxes, the middle 60% pay 9.5%, and the top 1% pay only 2.9% of their income in taxes. Unless this disparity is corrected, any tax increase by the Legislature, like raising sales taxes or property taxes will only increase the tax burden on lower income taxpayers.
It’s time for the citizens of this state and its political leaders to mount a real campaign for tax reform to correct the regressiveness of our tax system. Implementing a progressive income tax; while reducing regressive taxes like sales taxes; and either expanding the current Homestead Exemption now limited to low income seniors and the disabled or adding circuit breaker legislation to help low income homeowners and renters; are changes that need serious consideration and action.
The state is waiting for leadership. The question is who will step forward. There is no better time than now to reform our tax system. If we don’t reform our broken system we can expect more measures like I-1033 to continue to fill this vacuum of leadership by progressives and liberals and those in the middle.
Below is a letter sent today to Governor Gregoire by the King County Democrats Legislative Action Committee. What do you think?
Dear Governor Gregoire:
The King County Democrats Legislative Action Committee is disappointed with your leadership on resolving our state budget crisis by not considering revenue increases as a necessary option. We are one of only two states (along with Louisiana!) where revenue increases are not on the table. Certainly circumstances have changed since your campaign last year. Leadership requires adapting to changed circumstances. The changed economic reality and the magnitude of the budget shortfall should provide a sufficient rationale to the public to explain why you have changed your mind as to how to deal with the current situation.
“An all-cuts budget doesn’t cut it.” We should not sacrifice the well-being and the very lives of our most sick and vulnerable citizens. Please support revenue increases to maintain our state’s safety net as well as provide for the educational needs of our children.
We believe a reasonable starting point should be that program cuts and revenue increases should be given equal weight in dealing with the budget shortfall. That means no more than 50% of the deficit should be program cuts. And a revenue package to make up the other 50% of the budget shortfall should be put on the ballot for voters to vote on.
Letting the voters decide is what they said they wanted. Give them the option. Let them make the final decision.
Sarajane Siegfriedt & Steve Zemke
King County Democrats Legislative Action Committee Co-Chairs
King County Democrats Chair
Add your name to the letter. A copy of the letter as a petition to sign is available at:
Does it sound to you like the Seattle School District really has this figured out? That’s quite a range – closing 3 schools up to triple that at 9 schools. It doesn’t inspire me to visualize that they are on top of this. One would think the numbers would be a little more precise. Of course a projected $24 million shortfall in their budget doesn’t help to calm anyone’s nerves and maybe they’re having trouble figuring out the numbers. Numbers have something to do with math.
As the Seattle PI notes:
“…the district’s longtime enrollment imbalances — largely a result of the district’s school-choice policy — have led to overcrowded schools in North Seattle and some underenrolled South End schools.
Even with the School Board’s 2006 decision to close seven school buildings, the district has 18 percent more classroom space than it needs for its students, according to a recent audit of the state’s 10 largest school districts.
District officials were already considering whether to close more schools when they learned that the district faces at least a $24 million shortfall in the 2009-10 budget. That deficit could grow to more than $44 million if the state withholds Initiative 728 money or cost-of-living increases because of the economic downturn. The initiative, aimed at reducing class size, was passed in 2000.
As a result, the School Board unanimously voted two weeks ago to authorize Superintendent Maria Goodloe-Johnson to immediately begin the process of closing schools.”
On Tuesday night, November 25, 2008 , the Seattle School District is going to announce their plans. As noted on the Seattle Public Schools website for Tuesday night:
“Preliminary recommendations presented by the Superintendent, and discussed by the Board at a School Board workshop at 6:00 p.m., John Stanford Center for Educational Excellence, 2445 3rd Avenue South. This workshop will be videotaped for later streaming on our Web site.”
The Seattle School District will then hold two public workshops on the preliminary sites chosen for closure and also will hold public hearings at the schools to be closed.
Thursday, December 4th, 6:30 p.m. – 8:30 p.m. John Stanford Center for Educational Excellence, Auditorium 2445 – 3rd Avenue South, Seattle, Washington
Saturday, December 6th, 9:30 – 11:30 AM Filipino Community Center, Main Ballroom 5740 Martin Luther King Way, Seattle, Washington
Public hearings will be held at buildings proposed for closure on Monday, December 15, Tuesday, December 16 and Thursday, December 18. Times and locations will be advertised and posted on the Seattle School district website. This link also has other dates and meetings that are relevant to the proposed school closures and is the best place to follow the process.
The school district site also notes that “Feedback related to capacity management and building closure is welcome. Comments may be emailed to email@example.com, to firstname.lastname@example.org or mailed to School Board, PO Box 34165, MS 11-010, Seattle, WA, 98124-1165. The School Board office phone number is 206 252 0040.”
There is at least one excellent community source to help track public reaction to the proposed closures and voicie your opinion. that is the Seattle Public Schools community blog
Another blog that posted information on the proposed school closures is the West Seattle Blog.
As they note “…South and West Seattle have the most likelihood of finding schools on this list, since the north end has been dealing with overcrowding,”
And then there’s this illuminating comment by westello on the West Seattle Blog post that rightly points out:
“…if you look at this schedule, the initial announcements are two days before Thanksgiving. The public hearings for each site are the days before the Winter Break right about the time most elementaries have their holiday concerts.
And the final list is to be announced right after the Winter Break. This is a lot to absorb and carry during Thanksgiving and the holidays. I know the district
didn’t mean to be cruel but the timing is harsh.
I appreciate the West Seattle blog keeping up with this but I think between the timing of the meetings and the economic realities overwhelming many, that this will not be on many people’s radar.”
Why is it again and again that the public seems to be at the tail end of each current crisis in the Seattle School District’s process? Doing all of this during the holiday season seems the least likely time to engage the public. But maybe that’s part of their plan.
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