Building an Economy that Works for Everyone

Building a Responsible Budget for Washington State

Since the Great Recession began in 2008, Washington has cut billions in funding for public services, damaging lives and constraining future opportunities. Class sizes are larger, fewer children are enrolled in quality early learning, young adults pay sharply higher tuition, and vulnerable elderly and disabled citizens have less ability to maintain healthy, independent lives.

Now the state faces an additional shortfall of over $1 billion between projected revenue and the amount needed to maintain this reduced level of services for the state’s growing population. On top of that, the Washington Supreme Court has ordered the legislature to fund public schools at a significantly higher level.

Meanwhile, special tax breaks drained an estimated $29 billion from the state General Fund budget during the 2011-13 biennium – nearly as much as the state collected in public revenue.

The legislature and public have no systematic way to evaluate tax breaks against investments that support economic opportunity, social mobility, and public health. Eliminating even the most egregious loophole requires  passing special legislation in the face of determined lobbying by corporate interests. As a result, some of the world’s most profitable corporations continue to receive tax breaks – many of them passed long ago for different purposes. And over 200 new tax preferences have been enacted just since the year 2000.

Legislators can ensure more equitable treatment of businesses and individuals, and promote investment in public priorities that create educational opportunities, promote small business growth, and protect residents’ health and safety, by:

  • Raising the business tax on services, as a first step toward a more fair and sustainable way to fund public services in a modern economy.
  • Closing tax breaks that do not benefit the majority of Washingtonians or serve important public interests;
  • Establishing a systematic way to evaluate and prioritize tax breaks – and automatically end those that are not more important than the state’s paramount duty: K-12 education.

As outlined below, taking these steps this year will create in $1.8 billion in new revenue, and save an additional $1.03 billion in tax expenditures, yielding $2.8 billion in the 2013-15 biennium.

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