State after state announces records tax cuts but crickets in Washington
Our state leaders like to boast that we do things differently in Washington. Nowhere is that truer than when it comes to whether to provide citizens tax relief. For example, the Governor and Majority party legislative leaders this week were all asked if it should be a priority to provide tax relief with the record revenue surpluses being forecasted. Their short answer was no. Other states across the country, however, are considering major tax cuts.
Here is how our state leaders responded to questions about tax relief.
The Governor pivoted away from the tax cut question, instead talking about all the spending needs he sees for the state (7:02 mark of TVW video).
The House Majority Leader said most of the billions in surplus revenues are "one-time funds," despite the fact the revenue forecast is projecting billions in growth over at least a four-year period (5:35 mark of TVW video).
Asked if a sales tax cut would be on the table, the Senate Majority Leader said we may see "targeted" tax relief, but broad-based tax cuts are unlikely since he believes we have so many spending needs facing the state (2:50 mark of TVW video).
In contrast, here are just a few of the bipartisan tax-cutting headlines from the across the country in just the last few days:
- California governor proposes tax cuts, expanded health care
- NY Gov. Kathy Hochul proposes $2.3 billion in tax relief for middle-class, small businesses
- Maryland Governor Proposes $4.6 Billion Tax Relief Package
- Tax cuts weighed by Kansas, Missouri amid budget surpluses
- Flush Georgia revenue could bring pay raises and tax cuts
- Reynolds and legislative leaders look to tax cuts in 2022
- Familiar tax cuts, new bonuses in Gov. McMaster's budget
- Idaho governor touts big education spending boost, tax cuts
- Ricketts, lawmaker vow to use excess revenue for tax cuts
As for the capacity to provide tax relief in Washington state, here are the revenue forecast number changes since the 2021-23 budget was adopted.
- March revenue forecast (current budget based on this forecast)
- 2021-23: $56.615 billion
- 2023-25: $59.906 billion
- June forecast increase over four years – $4.043 billion increase
- 2021-23: $58.413 billion - $1.798 billion increase
- 2023-25: $62.151 billion - $2.245 billion increase
- September forecast increase over four years – $1.859 billion increase
- 2021-23: $59.341 billion - $928 million increase
- 2023-25: $63.082 billion - $931 million increase
- November forecast increase over four years -$1.862 billion increase
- 2021-23: $60.238 billion – $897 million increase
- 2023-25: $64.047 billion – $965 million increase
This means the total four-year increase in projected revenue since lawmakers adopted the 2021-23 budget is $7.764 billion.
If Washington State can’t provide broad-based tax relief with the current revenue forecast and budget outlook, it’s hard to see when it ever will.
With a balanced budget, billions in reserves, and revenue projections continuing to exceed expectations, the case for sales tax relief is overwhelming.