414 Legislative Building ● PO Box 40442 ● Olympia, WA 98504-0412
Senate Republican Whip
December 28, 2012
The 12 Biggest Myths of Olympia
Hello Whatcom County,
This probably won’t come as a shock to you, but Olympia occasionally struggles with reality. Sometimes it’s by accident – a false assertion gets repeated so many times that it becomes fact. In other instances, people may purposely perpetuate an idea to distort the debate on an issue.
In either case, these misconceptions are dangerous because they’re often used as the basis for budgets and policy decisions. That’s why I’m taking this opportunity to debunk some of Olympia’s biggest myths.
I welcome your feedback on this list – send me a vote for what you think is the biggest myth and I’ll share the results in a few weeks. Additionally, feel free to pass along any other myths you’ve heard. My plan is to make this an ongoing feature on www.senatorericksen.com so check in regularly to see new falsehoods exposed.
1. Washington state has a budget deficit
In the next two-year budget cycle, Washington will receive more tax dollars than at any time in our state’s history. State tax receipts are expected to grow at almost 7 percent and total tax dollars to the state are anticipated to be $32.8 billion. There’s enough money coming into the state to fully fund all of our priorities – including education.
2. Education funding has been slashed
Despite what’s often reported in the media and by interest groups, Washington state is spending more on education than ever before. To be exact, K-12 education spending has continually grown and now receives 93 percent more funding than it did 20 years ago.
3. This proposal is not a tax, it’s a fee
Because of the two-thirds threshold for tax increases Washington voters have approved five times (most recently with Initiative 1185 in November), it’s difficult to raise taxes in Olympia. Fee increases, on the other hand, can be enacted by a simple majority. The result of this is that everyone in Olympia tries to dress up revenue increase proposals as fees rather than taxes. If it walks like a tax and talks like a tax, it is a tax – and it should be subject to the two-thirds threshold.
4. Washington has one of the best business climates in the nation
Many publications put out lists of the best states for business and Washington often ranks towards the top. It’s important to note these lists give heavy weight to our lack of an income tax; they don’t take into account factors like our business and occupation (B&O) tax structure, which is the worst in the nation. They also don’t look at our sky-high workers’ compensation rates and highest-in-the-nation minimum wage rates. What they’re really measuring is which states are good for wealthy business people to live in, not where to operate a business.
5. Washington’s constitution requires a balanced budget
People in Olympia and around the state often say that Washington’s constitution requires a balanced budget. The truth is that Washington’s constitution only requires the governor to propose a balanced budget. The Legislature isn’t bound to any such requirement for the budget that ultimately passes into law. That’s something I’d like to see changed, and in the coming session I’ll propose a constitutional amendment requiring the state’s budget to balance.
6. State government receives “revenue”
You’ll often hear about how much “revenue” state government is taking in. There’s even a state agency known as the “Economic Revenue Forecast Council.” But the state doesn’t receive revenue; it only takes tax dollars. The distinction is subtle but important. Businesses take in revenue when they sell a product or a service. That’s fundamentally different from government, which can only generate money by taxing people.
7. Washington’s lottery proceeds fund K-12 education
When a lottery was proposed in Washington in the late 70′s, many people thought that education would be a good recipient of the funds. But when our lottery was established in 1982, proceeds were instead directed to the state’s general fund. They’ve been shifted several times since and now primarily fund college scholarships and debt on Seattle sports stadiums.
8. An income tax is more stable than a sales tax
Many people around Olympia will tell you that our tax system, which relies heavily on sales tax receipts, is inherently unstable and that an income tax would provide more predictable tax dollars. That’s patently untrue – study after study has shown that income tax is more volatile than sales tax. For proof, we need look no further than Oregon and California, both of which rely primarily on income tax and endure more pronounced peaks and valleys of tax dollars.
9. Over 95 percent of transportation projects are delivered on-time and within-budget
Every year, the Department of Transportation revises its projections for projects. They then base performance on these “most-recent expectations,” including what the Department considers on-time and within-budget. Essentially, they move the goal posts for projects every year. Really, what’s amazing is that any projects come in late or over budget using this system.
10. Washington ranks behind Mississippi in education funding
This statistic is often used in Olympia to point out how dire our education-funding situation is. Fortunately for our state and our schools, it’s a blatant falsehood. State spending towards education in Washington amounts to around $6.9 billion per year, compared to $2.1 billion in Mississippi. On a per-pupil basis, Washington spends $9,452 annually for every student to Mississippi’s $8,119.
11. Governor Gregoire reduced tribal gambling
Gov. Gregoire claimed that she decreased tribal gambling because an agreement she reached with the tribes was less generous than what former Gov. Locke had negotiated. The crucial difference is that Locke’s plan included revenue sharing for the state, so the public would see some return on tribal gambling (as is the case in at least 21 other states). The proof is in the pudding, however, and tribal gambling receipts have soared 139 percent during Gregoire’s time in office.
12. We’ll reform government after this fiscal crisis, but first we have to raise taxes
Regardless of the year and the fiscal situation we find ourselves in, according to those who protect the status quo in Olympia, this isn’t the time to reform government. They’ll say that as soon as we get through this crisis, then we’ll take a hard look at spending. The truth is, the best time to reform government is yesterday – or better yet, last year. If anything, tax shortfalls are a reason to justify reforms, not to shy away from them.
Washington State Senator, 42nd District
Olympia office: (360) 786-7682