In preparation of the upcoming biennial budget, Ross Hunter, D-Medina, met with Bellevue residents to discuss the doom and gloom ahead.
“We can’t just do what we did last year,” Hunter said. “We either whack the bejesus out of stuff … or we increase revenue or some combination of both.”
During the last biennium, the state’s lawmakers passed a $33.8 billion budget, but since that time the state Supreme Court ruled Washington must address the McCleary decision, voters passed an initiative reducing class sizes, inflation rose and the state lost several multi-hundred million dollar lawsuits.
According to Hunter’s projections, budgetary spending will have increased at least $7.6 billion, a more than 18 percent increase, to meet these new financial requirements, which don’t include compounding spending associated with the passage this fall of I-1351.
Although the Legislature agreed last month that the state’s economy is improving, only $430 million in additional revenue is expected for this biennium and $2.9 billion in the next.
“You can see that there’s a problem, a $4.4 billion problem,” Hunter said. “It’s a big gap, what are we going to do? I have no idea how to pay for this.”
Hunter told the Reporter the “rhinoceros in the room” is that he doesn’t have the two-thirds majority vote needed to alter the passage of I-1351, which itself is slated to cost at least $2 billion in the upcoming biennium and could be as much as $12 billion in the following years.
“I know I don’t have the votes today so we’ll continue to do what we always do, which is work on the budget,” he said.
Currently state revenue comes from three major sources, he said. Fifty percent from retail sales tax, 19 percent from business and occupation tax and 12 percent from property taxes.
Hunter said it could be possible to make some cuts, but most areas that could have funding reduced include higher education, children services, mental health services and/or close a prison. But no one on either side of the political aisle wants to do that, he said.
Raising the sales tax doesn’t seem viable as consumers will simply shop more and more online to avoid the increase and in turn, decrease the state’s revenue. Getting enough votes to increase property tax seems as easy as climbing Mount Rainier in the winter in flip flops, so that’s not likely to happen either, Hunter said.
As a step toward a solution, Hunter said he’s focusing on capital gains taxes, which tax investment profits.
Gov. Jay Inslee is reportedly reviewing the potential of taxing polluters in the state, but Hunter said he is unsure how far along the plan is and or what it looks like.
“There’s no magic solution,” Hunter said. “We need a more modern tax code to deal with the modern economy, one that is more fair in its application to the overall economy and isn’t putting the onus on the middle and lower class.”
