The coronavirus pandemic has left Washington state not only facing a public health emergency, but also a budget crisis that will shape public policy for years to come. We’ve seen an economic fallout like this before in our state, and the response by legislators then continues to haunt the decisions we make today.
During the 2008 financial crisis, the Legislature addressed a budget shortfall by cutting spending across the board. Now, our most important social services are drastically underfunded and struggling to keep up with demand when assistance is most needed.
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Austerity didn’t work in 2008 and it won’t work now.
This is especially clear given that we simultaneously have a historic number of houseless neighbors, few affordable housing options, and some of the richest men in the world all in Seattle. Income inequality has never been clearer in our state, and it hurts all of us in this time of crisis.
So, what are we dealing with?
As of the last forecast, Washington state is expecting a roughly $4 billion shortfall to our state budget over the next few years. To put that in context, the state operating budget is $54 billion over a biennium. However, between constitutional requirements and federal matching dollars, 85% of the budget is constrained. This means that any cuts would be made to that remaining 15%—or $7.7 billion.
Low- and middle-income earners pay proportionally six times more in taxes than the wealthiest one percent.
That $7.7 billion includes funding for higher education, early learning, childcare, social services, and public health just to name a few vital programs we desperately need right now. Cutting the budget simply doesn’t work and it will only hurt the people who need help the most.
Each of these services can be funded if we rebalance our tax code to help working families and ask billionaires to pay their fair share.
This time around, we have an opportunity to diversify our state’s revenue sources so that the largest share of our statewide revenue no longer comes from our most vulnerable populations. As is, Washington’s tax code is completely upside-down, with the low- and middle-income earners paying six times more in taxes proportionate to their income than the wealthiest one percent.
A handful of people in our state have increased their net worth by hundreds of billions of dollars during this pandemic, while thousands of others have filed for unemployment that still isn’t enough to keep their families housed and fed. This is not only inequitable; it’s also inefficient and severely restricts statewide revenue.
I’ve been fighting for progressive tax reform in the Washington State Senate for the last two sessions, and I won’t stop that work until we have a fair and equitable path forward. The model we have been working under has led to an unacceptable wealth gap and reforming it would mean a more equal Washington for everyone. That’s the state that we will be working towards in Olympia this Legislative session.
Joe Nguyen is a member of the Washington state Senate representing the 34th District.