- There is no budget crisis, senator notes – it’s a spending crisis
- Collections will increase 4.2 percent – problem is, Legislature raised spending 19%
- Tax hikes will worsen recession – Legislature should focus on tax relief for small businesses
OLYMPIA – Washington will collect more taxes this year than ever before – a $2 billion increase – and if anyone thinks the state has a budget crisis, they just don’t understand Olympia, says Sen. Doug Ericksen, R-Ferndale.
“Only in Olympia would anybody think a $2 billion increase is a problem,” Ericksen said. “We don’t have a budget problem, we have a spending problem.”
“The narrative being put forward is that tax dollars are declining. This is just not true. Tax dollars to the state treasury are going up, not down. The budget-crisis narrative is being put forward by those who want big tax increases, a state income tax, and massive increases in state spending. We need tax relief to get our economy going again, not job-killing tax increases.”
A new state tax-and-fee forecast released this week shows money paid by taxpayers is increasing, despite the state-ordered closure of many businesses this spring to prevent the spread of coronavirus. The projection from the Economic and Revenue Forecast Council shows Washington will collect $2 billion more in taxes during the 2019-2021 biennium than it did during the 2017-19 budget period.
The same projection indicates tax collections will grow 4.2 percent, far faster than the economy as a whole. The real problem is that majority Democrats in the Legislature voted to increase spending 19 percent – and now don’t have enough money to cover it. Today many are calling for enormous tax increases that will allow them to avoid tough decisions to cut spending.
“Some lawmakers have trouble understanding they are part of the problem,” Ericksen said. “The rest of us knew they were digging a hole for the state when they voted for unsustainable increases in state spending. But they just wouldn’t listen, and a lot of them seem to have short memories, too. They forget that this is what got us in trouble during the last recession, just 10 years ago.
“Raising taxes in the middle of a recession will kill businesses and reduce job opportunities. We should be cutting taxes, not increasing them, to stimulate our economic recovery.
“I think every small business in the state would be delighted right now to see a 4.2 percent increase in receipts compared to last year. This isn’t complicated. $2 billion is plenty. If the Legislature can’t work with that, the problem isn’t tax collections, it’s the Legislature.”
Ericksen joins the House and Senate Republican caucuses in urging an immediate special session. Quick course corrections now will prevent bigger cuts later, they observe.