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Guest Commentary / Funding education

Closing loopholes is not increasing taxes

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By Mike Sells and Hans Dunshee
Corporate tax breaks or your children's and grandchildren's future. The ability to grow jobs and compete economically with a well-trained and educated workforce, or continuing outdated tax loopholes to special interests with highly paid lobbyists. Those are our choices.
A tax break is an advantage the government gives to a business so it can employ more people. We're talking about a two-way street, an agreement with the same goal in mind: prosperity. Tax breaks are not intended as corporate freebies, but that's what they become when businesses cease to create jobs. In what universe does it make sense to continue rewarding a business that has not kept its end of the bargain?
Apparently, in a Republican universe, since our colleagues across the aisle continue defending corporate giveaways instead of fighting for Washington's kids and working families.
Yes, revenues are up -- they got that part correct, but what they fail to acknowledge is that population, inflation and expenses have also increased. Before leaving office, Gov. Gregoire observed that it would cost $2.5 billion more in the next budget -- the one we're working on right now -- just to maintain the current level of education and services. That's more than the expected revenue increase of $2 billion.
That's not even taking into account the McCleary school funding Supreme Court decision, which requires significant additional funding to K-12 education. A joint legislative task force said the education bill is $1.4 billion for 2013-15, on the way to a total increase per two-year budget of $4.5 billion by 2018. House Democrats offered a budget that comes close to the target for this year: $1.3 billion. But, at best, the Republican budgets use gimmicks an accountant could go to jail for.
And it's not like we haven't tightened our belts plenty over the last six years. State revenues fell sharply in the Great Recession and we cut over $12 billion from spending. For instance, we didn't only cut the number of state employees -- down nearly 15 percent per capita, but we also reduced the salaries of those still on the payroll. Additionally, state revenues are down 15 percent per person, too.
We can't cut our way to prosperity. We need to invest in the future or our state and we shouldn't balance our budget by cutting education and services for seniors and the disabled.
Republicans say that taxes are bad for jobs. But taxes pay to educate the workers of today, and our children for tomorrow. A healthy, prosperous society that makes investments in its future is good for jobs. The Tax Foundation reports that our combined state and local tax burden ranks in the lower half among the states, compared to income. But a dozen states with a heavier tax burden enjoy a lower unemployment rate than we do.
Investments require revenue. Our solution is to close loopholes in our tax system carved out by special interests over the years who want to avoid paying the fair share that the rest of us pay. Stuff like an exemption created in the 1940s to help the timber and wood-products industry that now mainly benefits oil refiners who didn't even come to the state until after 1950, and who figured out a way to piggyback on that exemption. Or out-of-state shopper exemptions, or freight exemptions that few, if any, other states offer. What most states do have, however, are personal income taxes and corporate income taxes. Our state doesn't, but you don't hear much about how this setup significantly benefits businesses.
It's time to quit giving preference to special interests over kids. It's a choice: special interest tax loopholes or education.
Rep. Mike Sells (38th District) chairs the House Labor and Workforce Development Committee. Rep. Hans Dunshee (44th District) chairs the House Capital Budget Committee.

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