Now that Governor Gregoire has released her list of ways to cut another $2 to $4 billion from the state budget (in the hope that this cut-into-the-bone list will help people get interested in some new taxes), she and Department of Revenue director Suzan DelBene have turned their attention to revenue possibilities.  Faithful readers of the blog know that, despite being descended from East Texas bootleggers, we are big fans of new revenue to help keep state infrastructure from disappearing.

But there’s revenue and there’s revenue and what kind we raise makes a big difference.  For reasons that can only be traced to the power of Gramscian hegemony, voters in this state continue to reject the high earners income tax that every other state that has no oil to tax seems to have.  So that pretty much leaves us with a debate between sales tax and closing tax loopholes (although our friends at the Washington State Budget and Policy Institute have shown us some other ideas (here).

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The word on the street is that our state’s business plutarchy has let it be known that they would not necessarily spend their customary millions to defeat a state sales tax increase referendum (and referendum we must have thanks to Tim “minority rule” Eyman—see Gramscian hegemony above).  This is the kind of generosity we have come to expect from our business elites.

A sales tax increase would produce enough revenue that revenue pragmatists might in the end be willing to overlook the fact that it also will make a bad situation worse.  Sales tax falls disproportionately upon the poor and Washington already has the most regressive tax in the country (at last count, poor people in Washington paid an average of 17% in taxes, while rich folk paid 3%).  A sales tax increase just makes that worse and also makes us even more vulnerable to the continual boom and bust cycle that characterizes Washington revenue collection.

A sales tax increase could also have pretty far reaching political consequences.  If a sales tax increase heads to the ballot earmarked for education or health care, and the education and health care communities hold their nose about regressive taxes and work to pass the referendum, you can bet the farm that Rob McKenna will beat Jay Inslee with that all the way from March to November.  Every chance he gets, he’ll tell people that those damn teachers and nurses and state employees have once again dipped their hands into your pockets to pay for their outrageous salaries and lavish pensions.  The usual stuff about unions and social services and teachers will be bullshit but the part about regular people and people who are hurting paying more tax will be right.

Proponents of sales tax increases often argue that while it’s obviously not perfect, it’s across the board.  It doesn’t single anyone out, the way closing a tax loophole would.  The problem with that argument is that some people have already been singled out.  State employees have been laid off by the thousands, taken a 3% pay cut and are about to have their health care costs go up.

And yet Governor Gregoire’s list of proposed cuts included asking the state employees to reopen their contract and give back even more.  The Washington Federation of State Employees wasted no time responding with a polite “No Thanks” and then offered this suggestion to the governor:

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“Before there’s any talk of taking more from the state workforce she must convene a meeting of corporate entities and ask them to take a 3% cut in any tax break they are already receiving from the taxpayers of the state of Washington.”

A lot of people saw this as pithy rhetorical posturing, but a lot of others, including Seattle Times columnist Danny Westneat, thought it was a pretty good idea (link).

Probably the most disappointing response came from the governor herself.  “I hope they will reconsider and come to the table,” she said of the unions. “I don’t collective bargain with businesses. I collective bargain with my work force.”

It seems to us here at the blog that someone who has inhabited the office of governor to the point where she’s able to think of 63,000 state employees (most of whom will still be state employees when she’s no longer governor) as “my work force” ought to be able to muster the confidence to think of businesses that turn big profits in her state as people she could at least ask to accept their share of the shared sacrifice.  Businesses would be under no obligation to take her up on that offer, but, as WFSE pointed out, state employees are similarly under no obligation to reopen their contract.  It turns out, in this instance, that the governor’s power to further bleed her work force is no greater than her power to ask her businesses to give back 3% of their tax breaks.  Now is not the time to make technical distinctions about collective bargaining, now is the time to use the bully pulpit of the governor’s office to make the case for what’s right.

Which brings us to the other dubious thing the governor said when she released her budget cut ideas:

“I have not thought about revenue.”

That would make her about the only person in the state who hasn’t.

Governor Gregoire has reached that bittersweet place at the end of a politician’s career when she is no longer running for anything.  The silver lining in that lame duck cloud is that she’s free to say whatever she wants, not just what she thinks voters want to hear.  It is time for our elected leaders to lead and finally do something about the most regressive tax system in the country.