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Falsenomics 

Shedding the lies we've heard about the state budget will help make a tough problem more solvable

click to enlarge CALEB WALSH ILLUSTRATION
  • Caleb Walsh illustration

When faced with a challenge, it can be tempting to deny it rather than acknowledge that a difficult solution is needed. People will accept all kinds of untruths in order to cling to the status quo. Here are some of the most common falsehoods that stand in the way of building momentum for sorely needed state budget reform.

click to enlarge mariahmckay.jpg

1. We can cut our way out. The truth is, Washington has already drastically cut investments since the onset of the Great Recession, and most programs are nowhere near being restored to their pre-financial-collapse levels. The innocent "belt-tightening" touted by some is more like a noose slowly tightening around the necks of middle and working-class families.

2. We're subsidizing Seattle. The last time a study was conducted by the Secretary of State's Office of Financial Management, Spokane County residents received $1.35 in investments for every $1.00 paid in state taxes, while King County residents actually lost $0.38 on the dollar.

3. Everyone is overtaxed. Washington is currently ranked 35th in the country in combined state and local tax rates, according to the Bureau of Economic Analysis. With our unusual lack of income and capital-gains taxes, we also have the shameful distinction of being the most upside-down tax state in the entire country, according to the Institute on Taxation and Economic Policy. This means that everyday people pay up to seven times more of their income than those at the top of the economic brackets. So while it's true that average-income folks are overtaxed in our state, the wealthiest are getting away with paying less than half the national average in local and state taxes.

The same can be said for business taxes. According to the Department of Revenue, large industries like aerospace, high tech, and agriculture combined paid just $100 million in business and occupation taxes in 2013, thanks to generous tax loopholes granted to their powerful corporate lobbies. Meanwhile, the rest of businesses were made to pay $3.1 billion.

4. Services should pay for themselves. When you are dealing with the needs of vulnerable citizens, there aren't many opportunities for "fee-for-service" funding. Public sector taxes serve to resocialize the externalized costs of the private sector. As conservatives love to say, there is no free lunch! Either we invest in caring for people who are struggling, or they will continue to incur ever-greater costs that our broken budget can ill afford.

5. Schools and tunnels prove the fat. Many don't know that there are actually three state budgets that have their own separate revenue streams. In reality, tunnels paid for by the Transportation Budget and high school remodels paid for by the Capital Budget are generally not available to help pay for Operating Budget expenses, such as education and health care.

6. Nonprofits and churches can make up the difference. This is an attractive idea, but when you crunch the numbers, state cuts mean that real people are sentenced to suffer. Non-governmental organizations were hit by the same economic forces as our countercyclical state budget, which means that funds inconveniently dried up right when we needed them the most — and it still hurts.

By getting more familiar with these state budget truths, hopefully we can get closer to the solutions we need to reach Washington's full prosperity potential.♦

Mariah McKay is a fourth-generation daughter of Spokane and a community organizer campaigning for racial, social and economic justice. She has worked in biotech and government and currently serves as a public health advocate.

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