One term governor of Washington Mike Lowry isn’t remembered for his fiscal accomplishments. Lowry’s administration enacted budgets the resulted in tax surges and spending splurges. Lowry’s budget plan sought to raise the state’s fuel taxes to one of the highest levels in the country. And, despite a nation-wide recession and public resistance, Lowry pushed for state income tax. Under his term, taxes soared.
Yet, Lowry’s abyssal record is nothing compared to Jay Inslee’s agenda for Washington State.
Today, Jay Inslee revealed his budget proposal for 2015-17 that exceeds tax increases and spending Lowry ever enacted or proposed. Inslee’s budget plan comes in at $39 billion, a $5.2 billion (15.4%) increase from Washington State’s current budget.
The latest revenue projections indicate that the state will take in $37 billion in revenue, a $2.9 billion (8.6%) increase from the current budget. That means—despite the boost—Inslee’s added spending exceeds revenue. Our green governor proposes to account for that gap with new taxes—tax hikes he projects at $1.425 billion, but which places a much heavier burden on taxpayers in the long term.
Even with his projection of $1.5 billion in new taxes, Inslee’s budget still exceeds available revenue. Inslee plans to account for the excess costs by dipping into Washington State’s reserves for $600 million, including raiding the rainy day fund for $450 million.
Inslee’s budget includes two new major taxing sources, a state capital gains tax and—as Shift reported—a cap-and-tax scheme. Inslee projects these taxes would bring in $1.4 billion, but the long-term impacts to taxpayers are likely to be much greater. Evaluating the long-term impacts of these taxes, budget experts confirm that the net tax increase far surpasses $1.4 billion. In fact, they project a tax increase of over $3 billion in the 2017-19 biennia.
Inslee’s budget fails to meet Washington State’s Four Year Balanced Budget statute. Though Inslee proposes tax increases of over $3 billion, he still could not manage to balance the budget under the four-year outlook statute. That’s because he refuses to upset one of his major campaign donors, the Washington Education Association. Inslee’s budget leaves in place the requirement for $4 billion in funding as required by I-1353 for 2017-19.
Inslee’s budget also fails to meet the state’s spending limit. That means, in order to pass his budget, Inslee will need the Legislature to raise the spending limit. But, that’s not the only absurd measure Inslee would need the Legislature to take for his budget. Inslee needs a 60% vote in the Legislature in order to raid the state’s rainy day fund during good economic times.
It’s safe to say that Inslee just proposed historic tax and spending increases.