State tax increases: There’s simply no need

It happens every year: Work in Olympia on the state budget doesn’t really get underway until the revenue forecast comes out. Then, lawmakers have a clearer idea of how much money they have to work with and can set their negotiating strategies.

The latest revenue forecast came out Thursday, and it’s all positive news. In fact, it’s so positive that it’s undercutting the rationales for tax hike bills in the Legislature. Consider these figures from the forecast:

  • “[General fund] revenue for the 2017-19 biennium has been increased by $647 million, and revenue for the 2019-21 biennium has been increased by $671 million.”
  • “Forecasted revenue for the 2017-19 biennium is now $44.213 billion, 15.4% more than that of the 2015-17 biennium. Forecasted GF-S revenue for the 2019-21 biennium is now $48.253 billion, 9.1% higher than expected 2017- 19 biennial revenue.”
  • “The initial forecast of [general fund] revenue for the 2021-23 biennium is $51.932 billion, an increase of 7.6% over that of the 2019-21 biennium.”

State government is in the middle of a tax revenue boom. It is increasingly difficult for those who want large tax increases to justify why they’re necessary. And it’s further proof that the state had the resources to pay for McCleary through budget growth, if it prioritized K-12 spending. In fact, state revenues in the 2019-21 biennium will be far higher than what we assumed in 2012 – the state has had and will have the resources it needs to meet its education commitments.

Even The Stranger acknowledges that the strong economy and resulting tax revenues mean “school funding has disappeared [as a rationale] from the push for a carbon tax.” That is just as true for a capital gains income tax, which received a committee hearing yesterday.

Democrats will continue to push a capital gains tax as a fairness issue, and a carbon tax as an ecological issue. What has changed is that it’s now much harder for them to argue these taxes are necessary to fund schools.

The current situation is also a reminder that when a revenue-neutral carbon tax (which I supported) was on the ballot in the form of I-732, Inslee came out against it. That says a lot about his actual top priority is – not cutting carbon, but growing government.

There will still be a drive in Olympia for capital gains and carbon taxes, but there’s no doubt the positive revenue news is killing momentum. Sen. Christine Rolfes (D-Bainbridge Island), the chamber’s budget chair, is talking about property tax cuts in light of the revenues coming in, and Republicans will call for even larger tax relief.

Rolfes is also talking about sticking to a no-new-taxes budget. When legislative Democrats are saying that, you can be sure Washington state government doesn’t have a revenue problem.
-Rob McKenna

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Rob McKenna
Rob served two terms as Washington’s Attorney General, from 2005 to 2013. He successfully argued three cases before the U.S. Supreme Court and negotiated three of the largest consumer financial protection settlements in national history, all involving mortgage lending and servicing. He is a recognized leader in the development of consumer protections on the internet, in data protection and privacy regulation.