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1300908968-revenues.jpg

 

Despite Right-Wing Rhetoric, Our State's Budget Problems Are Caused by Falling Tax Revenue

 

It isn't the spending side of the equation that's knocked our state budget out of whack, but the other way around. State government has been steadily shrinking over most of the past 15 years, and dramatically so during the past several.

 

In fact, what Washington has is a structural revenue deficit that no amount of downsizing, streamlining, or resetting can fix. Not even an economic recovery can reverse this trend.

 

As the chart above clearly illustrates, state general fund revenues as a share of the overall state economy have been steadily shrinking for the past decade and a half, falling from 6.9 percent of personal income in 1995 all the way down to 4.7 percent today, according to the Washington State Economic and Revenue Forecast Council. That means the typical Washington household's state tax "burden" has shrunk by an average of 30 percent.

 

As the anti-taxers gleefully point out, both state spending and full-time employees grew during much of this period. But they refuse to accept the fact that spending didn't grow nearly as fast as the overall economy, the measure that most closely tracks growth in demand for government services and investment. In other words, the state's relative ability to provide basic services has slowly diminished. Then, as our nation plunged into recession, so did consumer spending, and that's when the shit really hit the fan.

 

Between 2008 and 2010, general fund revenue collapsed from $15.7 billion to $13.6 billion, resulting in massive layoffs and spending cutbacks. But even during the worst of the recession, both our economy and our population continued to grow, accelerating a decade-long trend of declining per capita revenues, which plummeted from $2,217 in 2006 to $1,827 in 2010. What for years had been a gradual decline in the state's ability to meet the needs of its citizens has now become a full-scale retreat.

 

"This is a revenue crisis, pure and simple," says Washington State Budget & Policy Center executive director Remy Trupin. "Washingtonians have stopped spending money—thereby reducing tax revenue—due to the meltdown on Wall Street that led to the Great Recession. To suggest otherwise is to literally blame the victim."

 

Even a robust economic recovery won't turn things around if the long-term structural problems persist. According to the latest state Department of Revenue data, Washington relies on the sales tax for over 52 percent of general fund revenues—more than nearly any other state—a tax that has been shrinking as a percentage of the economy for at least the past half-century. For example: In 1959, the sale of goods and services subject to Washington's tax accounted for 32 percent of total consumer spending. By 2000, this number had dropped to less than 26 percent. For decades, state lawmakers responded by periodically raising the sales tax rate. But the last such hike was back in 1983.

 

Meanwhile, lawmakers have rewarded businesses by passing over $1.6 billion a year in new tax breaks since 1995 alone, only further exacerbating Washington's long-term structural revenue deficit.

Edited by j_b
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The state legislators are considering "closing tax loopholes", but it appears that this will require a 2/3rd majority as it would raise taxes according to that wonkly I-960. So I guess this, and last year's election, already show where the voters are on taxes.

 

And yet, Eymanoid ditto-heads aren't obstacles to solving the crisis, progressives are. Thanks for "keeping it real".

 

While I agree that it's a stupid law, there was, well a vast majority of voters who went for it - so it wasn't just crackpots and lost souls. Maybe people are just stupid and vote against their best interest - I dunno. But a majority went for it and here we are.

 

Glad to see we're on the same page as far as that goes. It seems like the main difference is your continued willingness to play what is essentially a rigged game. If we all know that the extension of tax cuts and the passage of "stupid laws" punctuated by the economic crash got us here and is keeping us here, why are you so willing to play inside the box built for us by the anti-gubmint wonks and the sheeple they duped? "Just doing the math" makes sense when it's math, not when it's just politics. Accepting the narrowed narrative framework and the rigged playing field created by folks who knew exactly what they were doing when they passed this crap means you've already lost.

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Hey - I vote for who I think can do the best job. I visit my state and federal representatives' offices twice a year. I give to progressive causes.

 

But it doesn't give me the privilege of ignoring reality and what the voters have put on the table. You can continue making all the noise you want - but fiscal reality is staring the policy makers in the face. They don't have your luxury of ignoring the facts. And - I do believe that some minor tweaks need to be made to unsustainable benefit packages in government.

 

 

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"No bill shall become a law unless on its final passage the vote be taken by yeas and nays, the names of the members voting for and against the same be entered on the journal of each house, and a majority of the members elected to each house be recorded thereon as voting in its favor."

 

Moreover, a simple majority cannot decide that a super majority is needed to make rules.

 

Maybe you could hook up with Pat and your jurisprudence expertise could run it through the courts in time for the budget talks. In the meantime it's the law.

 

Was I just bestowed an honorary law degree?

 

Kewwwwwllllll.

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Hey - I vote for who I think can do the best job. I visit my state and federal representatives' offices twice a year. I give to progressive causes.

 

But it doesn't give me the privilege of ignoring reality and what the voters have put on the table. You can continue making all the noise you want - but fiscal reality is staring the policy makers in the face. They don't have your luxury of ignoring the facts. And - I do believe that some minor tweaks need to be made to unsustainable benefit packages in government.

 

We're not politicians, we're citizens. We're not constrained by focus-grouped-out-the-ass politics and the fear of "political suicide" when we talk about potential solutions. Politicians don't talk about raising taxes or the impact of giving away tax cuts instead of funding its obligations because it's not part of the story or because it wouldn't go a long way toward solving the mess, they don't talk about it because they think it would be "political suicide".

 

I expect politicians (silly me) to exercise leadership, to get the story right, and frame issues. Instead, American politics has drifted into a model of governance where our political leaders have become Burger King employees "giving us what we want" based on constant polling and focus grouping. The problem with that, of course, is that we don't always know what we want or what's needed for the long term health of the community. California is a perfect example: people don't want taxes but they want and need services. They have an initiative process and legislative constraints that compound the schizophenia and build the kind of straightjacket that Washingtonians are finding themselves in.

 

Ignoring the facts and ignoring fiscal reality is exactly what pols are doing when they don't address how we got here (worse when they find scapegoats who've nothing to do with it), and leave one half of the revenue story completely off the table. Claiming that raising taxes is "impossible" and leaving it at that means they're putting their own skin ahead of what's best for the communities they're supposed to serve. A one-term wonder making noise, raising hell, putting forward good ideas and changing the parameters of the debate are worth twenty legislators willing to play in the neoliberal cat box these douchebags have created for us.

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"No bill shall become a law unless on its final passage the vote be taken by yeas and nays, the names of the members voting for and against the same be entered on the journal of each house, and a majority of the members elected to each house be recorded thereon as voting in its favor."

 

Moreover, a simple majority cannot decide that a super majority is needed to make rules.

 

Maybe you could hook up with Pat and your jurisprudence expertise could run it through the courts in time for the budget talks. In the meantime it's the law.

 

Was I just bestowed an honorary law degree?

 

Kewwwwwllllll.

 

I didn't know anyone else with the correct connections.

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Hey - I vote for who I think can do the best job. I visit my state and federal representatives' offices twice a year. I give to progressive causes.

 

But it doesn't give me the privilege of ignoring reality and what the voters have put on the table. You can continue making all the noise you want - but fiscal reality is staring the policy makers in the face. They don't have your luxury of ignoring the facts. And - I do believe that some minor tweaks need to be made to unsustainable benefit packages in government.

 

We're not politicians, we're citizens. We're not constrained by focus-grouped-out-the-ass politics and the fear of "political suicide" when we talk about potential solutions. Politicians don't talk about raising taxes or the impact of giving away tax cuts instead of funding its obligations because it's not part of the story or because it wouldn't go a long way toward solving the mess, they don't talk about it because they think it would be "political suicide".

 

I expect politicians (silly me) to exercise leadership, to get the story right, and frame issues. Instead, American politics has drifted into a model of governance where our political leaders have become Burger King employees "giving us what we want" based on constant polling and focus grouping. The problem with that, of course, is that we don't always know what we want or what's needed for the long term health of the community. California is a perfect example: people don't want taxes but they want and need services. They have an initiative process and legislative constraints that compound the schizophenia and build the kind of straightjacket that Washingtonians are finding themselves in.

 

Ignoring the facts and ignoring fiscal reality is exactly what pols are doing when they don't address how we got here (worse when they find scapegoats who've nothing to do with it), and leave one half of the revenue story completely off the table. Claiming that raising taxes is "impossible" and leaving it at that means they're putting their own skin ahead of what's best for the communities they're supposed to serve. A one-term wonder making noise, raising hell, putting forward good ideas and changing the parameters of the debate are worth twenty legislators willing to play in the neoliberal cat box these douchebags have created for us.

 

You make good points about the reality of the leadership vacuum. There is that messy thing about democracy though. Who would reasonably think a tax increase package is going to pass today in WA. I'm all for the long haul and working towards that goal - but - with an over $5M shortfall in the coming two year budget, I'm also a realist. Can't stick you head in the sand and make beleive it will go away if only....

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We're not politicians, we're citizens. We're not constrained by focus-grouped-out-the-ass politics and the fear of "political suicide" when we talk about potential solutions. Politicians don't talk about raising taxes or the impact of giving away tax cuts instead of funding its obligations because it's not part of the story or because it wouldn't go a long way toward solving the mess, they don't talk about it because they think it would be "political suicide".

 

I expect politicians (silly me) to exercise leadership, to get the story right, and frame issues. Instead, American politics has drifted into a model of governance where our political leaders have become Burger King employees "giving us what we want" based on constant polling and focus grouping. The problem with that, of course, is that we don't always know what we want or what's needed for the long term health of the community. California is a perfect example: people don't want taxes but they want and need services. They have an initiative process and legislative constraints that compound the schizophenia and build the kind of straightjacket that Washingtonians are finding themselves in.

 

Ignoring the facts and ignoring fiscal reality is exactly what pols are doing when they don't address how we got here (worse when they find scapegoats who've nothing to do with it), and leave one half of the revenue story completely off the table. Claiming that raising taxes is "impossible" and leaving it at that means they're putting their own skin ahead of what's best for the communities they're supposed to serve. A one-term wonder making noise, raising hell, putting forward good ideas and changing the parameters of the debate are worth twenty legislators willing to play in the neoliberal cat box these douchebags have created for us.

 

Well spoken. Nationally: http://www.cnbc.com/id/42246531

 

"In the Sovereign Fiscal Responsibility Index, the Comeback America Initiative ranked 34 countries according to their ability to meet their financial challenges, and the US finished 28th, said David Walker, head of the organization and former US comptroller general."

 

.............

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[..]I'm also a realist. Can't stick you head in the sand and make beleive it will go away if only....

 

Pretending that cutting spending will solve the budget shortfall is no more being a realist than sticking one's head in the sand.

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I'll bow out of this circular discussion.

 

Here's the facts: We have a $5M+ budget deficit in WA over the next two years. The WA voters have turned down even a modest tax increase on candy and such - so any increase in revenue isn't in the picture. WA must have a balanced budget. Thus, more cuts are coming.

 

My opinion: I'd rather see some trims to unsustainable benefit packages then reduced services to the poor or other vulneralble programs.

 

If you have a solution, let's hear it.

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I'll bow out of this circular discussion.

 

Here's the facts: We have a $5M+ budget deficit in WA over the next two years. The WA voters have turned down even a modest tax increase on candy and such - so any increase in revenue isn't in the picture. WA must have a balanced budget. Thus, more cuts are coming.

 

My opinion: I'd rather see some trims to unsustainable benefit packages then reduced services to the poor or other vulneralble programs.

 

If you have a solution, let's hear it.

 

....Crickets....

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Your employer can cut his expenses until he goes out of business if he wants to, but the state cannot go out of business. The state has to provide services; it's not up to the choice of regressives and their Democratic enablers.

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I'll bow out of this circular discussion.

 

Here's the facts: We have a $5M+ budget deficit in WA over the [..]

If you have a solution, let's hear it.

 

....Crickets....

 

Bullshit. Jim has been told many times there is no solution at the local level despite his rhetorical saussage making.

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No! without social contract there is no state and the social contract is in part defined by the constitution. For example: "It is the paramount duty of the state to make ample provision for the education of all children residing within its borders, without distinction or preference on account of race, color, caste, or sex."

 

Washington state constitution

 

 

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Which am I - regressive or enabler? I loves me some black and white labels. So...useful in problem solving, no?

 

Claiming that austerity is the only choice amounts to enabling regressive tactics of starving the beast. Your choice!

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