Building an Economy that Works for Everyone

Education reform will require new revenue – here are a few ideas

Given the decision of the Washington State Supreme Court in the McCleary case, which highlighted Washington’s failure to adequately fund education, the new legislature and Governor will soon be looking for new revenue to meet the state’s financial obligation to basic education.

Educational reforms alone will require at least $1 billion in new public revenue in the 2013-15 biennium, with the bill for full implementation of K-12 reform rising to a likely $6 billion by 2017-19. Where could that money come from – without starving the services that protect and raise the quality of life for all?

Here are some small steps aimed at ending special tax preferences and finding progressive rate increases.

end tax preferences

In addition, a 5% capital gains tax with exemptions to exclude middle- and lower-income state residents (as proposed in 2012 in HB 2563), would raise $1.4 billion per biennium – enough for significant progress toward education reform goals.

However, in the long-term more substantive changes will be necessary to bring Washington’s tax structure into the 21st century. The 2002 Tax Structure Study Committee (Gates Commission) and earlier bipartisan commissions have recommended the key elements for a sustainable revenue system, including:

  1. Adding a personal income tax – 43 states have a personal income tax, which helps assure revenue growth as the economy changes, and makes the tax system more fair across incomes.
  2. Lowering the sales tax –will offset the impact of a new income tax for low- and moderate-income households, and promote equity for small and expanding businesses.
  3. Making business taxes more equitable – Washington’s business taxes could be made more fair for small, new, and expanding firms, for instance by allowing deductions for key expenses.

Read more about Washington’s budget and revenue reform options here »

  • Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

More To Read

May 2, 2024

Baby Bonds: A Step Toward Racial and Economic Equity

The Washington Future Fund would bring this innovative, anti-racist policy to the Evergreen State

May 1, 2024

Laws Targeting LGBTQ Youth Aren’t Just Bad for Kids – They’re Bad For The Economy

The harm done by anti-LGBTQ laws expands so much further than queer children and teens

April 26, 2024

What is WA Cares and Why Does It Matter for Washingtonians?

We need to defend this important policy from billionaires looking to save a buck