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Scandal!

Submitted by frank swanson on April 17, 2005 - 11:25am.

Them damn Democrats did it again: they're making it easier to raise taxes by changing the parameters of I-601. Governor Gregoire is certain to sign the bill this week.

In this age of no frills politics, where every land-owning white man can pull himself up by his bootstraps with the grit Vishnu gave him, why are those goddamn liberals up to their old tricks? Don't they know I-601 is a citizen-passed law reflecting the universal desire to keep government spending in check? What's wrong with the leadership in this flippin' dippin' state?

Depending on your political bent, it's a reasonable line questions, I suppose, but I suspect it has something to do with the [presumably] unintended consequences the structure of I-601 imposes. I-601, as passed by the citizenry in 1993, places a budgetary growth cap on spending. This cap is determined by a fiscal growth factor derived from the 3-year average of state population growth and IPD-adjusted inflation, each calculated on a two-year lag. The potential trouble with such a system is that it's based on yesterday's news with little to do with what's going on today.

Say, for example, the state is in a recession and budgets are cut, which happens in this cyclic climate. During the subsequent boom years, when increased services are in demand, the relatively dampened budgetary base cannot meet those needs, so increases are necessary. Increases, however, are limited under I-601 to a rate lower than the state's economic increases, so they are likewise depressed in this situation. Resultant is spending that does not always keep up with current need.

What arguably would be a measure more reflective of the current economic need would be to incorporate a rate of budgetary growth that reflects the growth rate in personal income, which not coincidentally is higher than the current I-601 growth cap. Under such a scenario, state spending is aligned with state income. Some might call that a commonsense approach to restricting government spending while better meeting the needs of the public it serves. Apparently the Democrats in Olympia fall into this camp, as that's what the proposition going to Gregoire tomorrow calls for. Go figure.

Posted in Washington State Politics | frank swanson's blog
corporate welfare

linking budget spending to personal income as suggested sounds nice. unfortunately, health care costs (from drug and insurance companies) are not growing proportionally to our income levels either.

besides, how else are we going to replace the 3.2 bil that locke and our wonderful dems decided to give boeing?

Submitted by upchuck on April 17, 2005 - 4:54pm.
agreed

your comment regarding health care costs is a good one, and you could add to it the cost of housing in the greater Seattle metropolitan area. Those, as well as corporate welfare, are issues I'd like to see taken more seriously; however, in the context of changing the parameters of a citizen-passed law that restricts spending, I don't think anyone wants to be the one to propose restrictions be removed altogether. That's too unpalatable politically I'm guessing. Not to discredit your point, however - it's a good one.

As an aside, I don't know that one can wholly get away from corporate welfare without shooting one's self in the foot. Given the system of somewhat perverse incentives presently in place nationally, in my view it's difficult for states to take a hardline stance on such subsidy. It becomes a bit of a throwing out the baby with the bathwater situation. That said, it seems it is a tool that should be used with a far greater level of care and consideration than it has been, which arguably is the reason it has become as much an entitlement as an incentive.

Submitted by frank swanson on April 17, 2005 - 9:15pm.
"boeing has us over a barrell"

as one state rep put it to me referring to boeing, "they really have us over a barrell" yes, i understand your concerns. corporate welfare needs to be adressed nationally. otherwise states feel they must compete in a bidding war.

i still believe in progressive tax reform for washington state. we can survive and be sustainable without boeing if we must. we can develop our public resources, invest in renewable enerygy, local agriculture, expand education, and kick ass.

anyone who tells you that the progressive vision can't succeed is either buying or selling the lies...

it's time for big corps to stop living off the state's tit!

Submitted by upchuck on April 17, 2005 - 11:11pm.
a progressive income tax

yes! i've been yelling this for quite a while. now that the D's are in control of both the state Senate and House, this needs to be addressed.

our state has one of the most regressive tax systems in the country. that ain't cool for a state which is suppose to be so progressive.

it's time for the D's to stand up, end the regressive sales tax, and put in a progressive income tax. i know this'll take a while to enact, but the discussion needs to begin now, so it can be accomplished in the next decade or so.

Submitted by grant on April 18, 2005 - 10:11am.
Beyond Boeing

Not only can we survive as a state without Boeing, we have to. For decades decades decades people have been wringing their hands over Washington being a one-industry state. Even with the supposedly huge boom in the information technology industry, the biggest money-maker for the central Puget Sound region, and the state, is STILL the freaking aerospace industry.

Hmm, I just went on for like five paragraphs and then realized, I should probably just write a post about this. Buh-bye.

Submitted by amy on April 18, 2005 - 12:14pm.

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