Tag Archives: new state revenue

Need to raise $1.7 billion in revenues

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.)

Representative Cody Proposes Tax Increase on Tobacco to Raise New Revenue

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