Protecting taxpayers from tax increases, bigger government

 Protecting taxpayers from tax increases, bigger government

  • Ericksen plan requires supermajority votes for tax increases
  • Puts budgeting back on track with spending limits, restrictions
  • Provides tax relief, reduces temptation to spend irresponsibly

Note: The following op-ed was distributed to new media outlets in the 42nd Legislative District as part of Sen. Doug Ericksen’s “Fixing Washington” series, a periodic series of articles about the biggest issues before the Washington Legislature in 2020.

By Sen. Doug Ericksen

Let’s suppose you get lucky and find 10 grand in the street. You probably wouldn’t make a down payment on a Rolls Royce, because you’d know your next payment might be a problem.

If only Olympia could figure that out. Sustainable budgeting and a few serious reforms could stave off most of the pressure we face every session for enormous tax increases. That would allow us to focus what we really ought to be doing, making sure our spending is efficient and effective, and that taxpayer money goes to the things that are truly important.

Most of us at the statehouse understand this principle. It’s just that many prefer to ignore it. Spending skyrockets when the economy booms, and we face painful retrenchment whenever recession hits. Last time it happened was a decade ago, when the Legislature went on a spending spree just before the Wall Street crash. The state found itself $11 billion in the hole, and the result was the biggest tax increase in state history and massive layoffs of new state hires.

Now we’re poised to repeat that nightmare, after an even bigger run-up in state spending – an 80 percent increase since 2013. The problem is our tendency to spend every dime in state coffers. Most of the time we’re launching and expanding programs we’ll have to support forever. We know good times never last forever, but we just can’t seem to help ourselves. We see it, we spend it.

We can curb this natural tendency to spend ourselves into disaster by building on the best ideas from this state and others. Here’s my prescription:

  • Two-thirds for taxes. Tax increases are really the easy way out – they allow the Legislature to avoid tough choices about spending that will inevitably disappoint politically powerful special-interest groups. By requiring a two-thirds vote of the Legislature to raise taxes, we can ensure both parties must agree a tax increase is the best solution. The people of Washington imposed this requirement by initiative five times over the last 27 years, and it was a smashing success whenever it was in force. Lawmakers were compelled to set priorities. Unfortunately, the state Supreme Court ruled in 2013 that this requirement cannot be imposed by a law or an initiative. Until we are able to pass a constitutional amendment, we can write this requirement into House and Senate rules.
  • Put budgeting back on track with spending limits. We’ve tried this in the past, with the granddaddy of all tax revolts, Initiative 601 in 1993. That measure limited the growth of state spending to a factor of inflation and population growth. The rules remain on the books, but spending advocates quickly undermined the restrictions with accounting tricks. I have introduced legislation that would prohibit the trickery, restore the spending limits, and give the Legislature the flexibility to address immediate problems.

Under my proposal, Senate Bill 5609, when tax collections exceed the spending limit, the money would go to a “state expenditure limit overflow” account. This money could be used for one-time expenses, like state construction projects or highways. Money that isn’t spent in this way would have to be returned to taxpayers in the form of property tax reductions. This way we can make sure extraordinary spikes in tax collections won’t be used to create new obligations we’ll have to fund in future years.

  • Tax relief for citizens. In a separate proposal, SB 5610, I have proposed a reduction in the state sales tax, from 6.5 percent to 6 percent. This would return $1.7 billion to Washington taxpayers every two years and give our economy a shot in the arm. And not just that – by reducing tax collections, we also reduce temptation to spend ourselves into a hole. At the rate money has been gushing into state coffers, we ought to be able to give taxpayers a break.

As long as we have an enormous pile of cash in front of us, we will face an immense temptation to spend and ignore the long-term consequences. Yet there is nothing compassionate about ramping up programs one year and firing all the new hires the next. Better to make sure our spending is sustainable by reducing that pile a bit, returning some of it to the people who paid it, and putting taxpayers first.