Healthy state revenues should preclude tax increases

Mar 27, 2019
Written by Renée Sunde, President & CEO

New Washington State taxes, or no new taxes?

That question will dominate budget-adoption discussions for the rest of the 2019 Legislative session scheduled to adjourn on April 28.

Despite calls for a host of new taxes this session, retailers across the state see no justification for it. That’s because the state has been enjoying unprecedented financial growth reports or foresees revenue increases of between 12.3 percent and 15.3 percent in the state budget cycles between 2015 and 2021.

With our eyes fixed on state finances, Washington Retail is warning against acting upon the host of proposals that include new taxes on capital gains, various services, and carbon emissions. The bottom line is that we are in great shape thanks to a strong economy.

Says Representative J.T. Wilcox, the House Minority Leader of the state’s double-digit percentage gains in revenue: “That should be enough (revenue) for anybody. We don’t need new taxes in order to do the good things we need to do for the State of Washington and the people that live here. We cannot have an extravagant budget. We have to prepare for the next rainy day.”

State Treasurer Duane Davidson is concerned about the state’s savings.

“We’ve got growth that’s unprecedented, in the country,” he told a recent luncheon in Olympia. “…And yet we continue to tamper with transfers out of the rainy-day fund.”

Davidson continued: “There will be a recession, it’s just a matter of when.” He said Washington State already is short of setting aside 15 percent of general fund spending in the event of an economic downturn, as recommended by the Association of Government Finance Officers.

“I don’ t think, right now, the state is equipped, basically, to face that,” Davidson said.

 Neither are retailers, particularly small businesses, throughout the state. They all are facing new layers of expenses from rising minimum wages to paid sick and safe leave requirements and other workplace benefits that cost more. Heaping any of the new taxes being talked about this session would make these businesses that much less prepared for an economic slowdown.

 The job of adopting a new state budget is akin to ordering lunch. Ordering from the menu of new taxes under consideration in Olympia would be like consuming an appetizer, seven-course meal, drinks and dessert when a half sandwich and a bowl of soup would be plenty.

 Retailers call for discipline as lawmakers prepare to adopt a new state budget. Spending for today without considering tomorrow could set Washington State up for painful and avoidable cuts in vital state services that remind us of the last recession a decade ago.