
As lawmakers head into the final half of the legislative session, they have some big decisions to make. Do they take a middle road and keep costs under control, or do they increase taxes and add new burdens on employers and families?
Unfortunately, unsustainable choices made in the past make the situation today tougher.
But first, the good news. Over the past decade, state tax revenues have increased by 99%, creating a gusher of tax money from our growing private-sector economy.
The Legislature responded by increasing spending by 114%. It’s like someone getting a huge raise, spending it all, and promising to spend even more in the future.
All those years of spending every penny (and a few more) have caught up with us. The state now faces a projected spending overrun of $12 billion-plus. That sounds daunting, but the revenue shortfall is only that large if lawmakers follow through and spend all the money they had pledged for programs they’ve created and expanded in recent years.
They don’t have to do that. It’s OK to push pause on spending now that it’s clear the money isn’t there. As Gov. Bob Ferguson noted in his inaugural address and again when he spoke to the Association of Washington Business in February, that’s what families do when faced with a budget crisis.
Employers are calling on lawmakers to make wiser spending choices with the record tax revenues that continue to pour in rather than proposing new spending and taxes to cover the shortfall
For context, while state tax collections doubled over the past decade — and state spending increased even more — Washington families saw their median household income increase by 55%, far from the windfall that state lawmakers spent (and overspent), but still a remarkable increase.
Taxes are already a big cost for everyone, but especially employers, who already pay half of the taxes in our state. Raising taxes at a time when the cost of living continues to rise and as our state and nation face choppy waters ahead is a recipe for even bigger problems in the future.
But there are other big choices facing lawmakers, too.
A major issue moving in the Legislature right now is an unwise proposal to extend unemployment benefits to striking workers.
If that idea makes you give a double-take, you’re not alone.
The unemployment system is a crucial part of our state’s safety net for people who lose their job through no fault or decision of their own. UI benefits help get them through while they search for a new job.
But a proposed law that is moving through the Legislature, Senate Bill 5041, would allow workers who choose to go out on strike to collect an unemployment check.
It’s the exact opposite of what the UI system was created for. It will increase costs for Washington employers, who already pay some of the highest unemployment taxes in the nation.
It would also upset the balance of give-and-take in labor negotiations, tipping the balance of power and possibly leading to longer strikes and greater disruptions.
Like the decisions about whether to increase spending and taxes, the Legislature faces a crossroads when it comes to the state’s cherished and vital unemployment system.
Employers urge legislators to be champions for the economy. Don’t break our unemployment insurance system by expanding it far beyond what it was created to do.
And don’t raise taxes to pay for overspending. Wise choices are needed, not new taxes.
Kris Johnson is president of the Association of Washington Business, the state’s chamber of commerce and manufacturers association.