Senate proposals to
add tax breaks,
defer revenue are unsustainable
Washington state legislators are in the home stretch of the 2014 session that
ends this Thursday. Over the next couple of days, deals will be struck not
only on the supplemental budget but also on some late-breaking policy bills
that affect it.
the Democrat-controlled House and the Republican-controlled Senate resolve
their budget differences, many are focused on whether another modest step will
be taken toward improving education funding in response to the Supreme
decision. But when the dust settles on Friday, the question will be: how
much harder did this Legislature make the job for right-sizing the 2015-17
In this election
year, some lawmakers avoided the subject of how we will come up with the money
needed to fix not only our schools, but our roads, bridges and transit
systems. To their credit, the House has taken some tough votes. Last year,
they passed a desperately needed transportation package funded by a gas-tax
increase. And this year, they voted to repeal more tax breaks to raise money
needed for classroom supplies and long-overdue cost-of-living pay adjustments
for teachers and school employees.
But Rodney Tom and
the Senate Republican majority have avoided those tough choices, both on
transportation and on schools. In fact, the Senate’s budget proposal and
several policy bills not only avoid those choices, they dig a deeper budget
hole by creating more special-interest tax breaks and deferring more revenue.
budget includes 18 new or extended tax breaks that cost $10.3 million in the
current 2013-15 budget, but will cost nearly $120 million by the 2017-19
to estimates by the Washington State Budget and Policy Center. Similarly,
Senate Republicans floated a transportation plan that exempts road projects
from sales taxes, which essentially takes General Fund dollars away from
schools and other state services to help fund transportation projects. That
just digs a deeper education hole to toss some dirt in the transportation
Another example is SB
6220. With a late lobbying push by restaurant and grocery lobbying groups,
the Senate voted 26-23 last week to exempt supermarkets, big-box stores and
other retailers from paying the 17 percent fee on liquor sales to restaurants,
bars and other liquor resellers. Those fees were created as part of
implementing Initiative 1183, the Costco-financed liquor privatization measure
approved in 2011 that proponents promised
would maintain — or increase — state revenue.
I-1183′s passage, Costco and other big retailers profiting on liquor
sales have been pushing lawmakers to chip away at such fees, arguing that
liquor taxes are too high. Last year, small privatized liquor stores were
exempted from paying the 17 percent fee for sales to restaurants and bars.
This year, the grocery and big-box stores want the same exemption so they can
take more business from the smaller stores and the existing liquor
distributors. SB 6220 would give them that.
The Teamsters, UFCW
Local 21, and the Washington State Labor Council oppose SB 6220 because it
would eliminate family-wage jobs at liquor distributors, which would still
have to pay the 17 percent fee. But, in addition to killing those jobs, SB
6220 also digs a deeper budget hole. It would cost the state more than $1.2
million in the current budget and double that in the next biennium — plus
future revenue projections are expected to show increased revenue losses to
decision suggests that $4.5 billion more per two-year budget cycle is needed
for schools by 2018. The truth is, for a decade or more, both Democrats and
Republicans have dug this budget hole by passing hundreds of large and
“small” tax breaks like SB 6220. To the credit of House budget writers
Reps. Reuven Carlyle (D-Seattle) and Ross Hunter (D-Medina), they are among
the leaders who remember the first law of holes: when you’re in one, stop
bipartisan school construction plan
But if you insist
on digging, make it a foundation for new and expanded public school buildings.
Among the clear
goals set out in the McCleary decision was to reduce class sizes in
Washington state, which are among
the largest in the nation, and to provide full-day kindergarten. That’s
not just a question of hiring more teachers. You need some place to put them.
Last year, the Mukilteo school district turned down state funding to expand
full-day kindergarten simply because they did not have the space. School
districts from across the state have said that they don’t have the necessary
classroom space to meet the goals outlined in McCleary.
Hans Dunshee (D-Snohomish) and Drew MacEwen (R-Union) introduced HB
2797 to sell $700 million in bonds backed by lottery revenue for grants
dedicated to constructing classrooms for full-day kindergarten, as well as K-3
class-size reduction. It passed the House on a strong bipartisan 90-7 vote
last week and was heard Monday in Senate Ways and Means.
State Treasurer Jim
McIntire has reportedly raised some concerns that HB 2797 could negatively
impact the state’s credit rating and make borrowing more expensive. But
there are four other states that sell lottery-backed bonds and they continue
to enjoy strong credit ratings.
important factor impacting our state credit rating is creating strong economic
growth which generates strong revenue streams,” said WSLC President Jeff
Johnson, explaining why the council supports HB 2797.
sizes and all-day kindergarten play a critical role in a child’s success,”
Dunshee said. “In order to accomplish these goals, new classrooms must be in
place before teachers can show up for work. Across the state, east and west,
schools struggle to find the space. This plan gives them the classrooms they
need and creates 7,000 jobs at the same time.”
And we need those
Last week, the
Employment Security Department announced
the state unemployment rate dropped to 6.4% in January and that, by some
measures, the state has now recovered the jobs lost during the 2008-10
recession. But not in the construction industry. Check out this chart from the
Federal Reserve Bank of St. Louis in its state-by-state assessment of the
remains one of the relatively few blue-collar jobs that can’t be offshored,
this graphic is one more piece of the problem of rising income inequality,” wrote
Seattle Times business columnist Jon Talton.
construction jobs created by HB 2797, which will be distributed throughout the
state, are an important and timely bonus to meeting a clear goal of the McCleary
State Labor Council, the State Building and Construction Trades Council, and
the rest of organized labor strongly urge the Senate to pass HB 2797.
next: 2014 Report & Voting Record
As soon as the
session ends this week, the Washington State Labor Council, AFL-CIO will begin
compiling its 2014 Legislative Report and Voting Record. That publication,
which summarizes the session and lists each legislators’ votes on important
issues for working families, will be published in April.
representing the WSLC's 600-plus affiliated unions will consider those voting
records -- along with candidate questionnaires and interviews—in deciding
who to support in the 2014 elections this fall. They will look at which
legislators were willing to support working families by voting for the shared
prosperity agenda, job creation, and revenue growth to meet our state’s
needs. Delegates will then gather on Saturday, May 10 at the Machinists
District 751 Hall in Seattle for the WSLC Committee on Political Education
(COPE) Convention to vote on election endorsements.
To learn how you
can serve as a delegate, contact your local union. For more information about
the COPE Convention, contact WSLC Political Director Karen Deal at