Building an Economy that Works for Everyone

Washington’s Structural Deficit: Without tax reform, pain will outlast recession

The worldwide recession has struck a major blow to state and local government budgets, including Washington’s. But Washington’s budget woes will outlast the recession because the state also has a structural deficit. Without raising rates or adding new taxes, revenues to support public services grow more slowly than the economy as a whole. As a result, our state is losing the ability to provide the kind of education system and infrastructure that residents and businesses need to thrive in the modern economy.

Many states with more flexible sources of revenue for public investments are keeping up better than Washington. For example, in the critical area of public education, Washington’s rank among the states has fallen from 17th in 1991-92 to 37th in 2005-06 in total per pupil spending, and from 24th to 46th K-12 spending per $1,000 of personal income

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