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Dear Friends and Neighbors,

Last week, the majority party in the House released their 2011-13 operating budget proposal, including their solutions to our approximately $5.1 billion budget shortfall.

As you read the papers and watch or listen to the newscasts over the next few weeks while the Legislature debates the budget in earnest, it's important to remember how we got to the point where we're facing such an immense deficit.  Not to point fingers and play political games, but to adhere to that old but wise adage: “Those who don't learn from history are condemned to repeat it.”

This budget shortfall is partially the result of excessive government spending when times were good – along with the reliance upon federal dollars and other one-time budget transfers when the economy started to falter.  Instead of quickly making changes two years ago – changes that would have been difficult, but would have led to budget stability today – budget writers kicked the can down the road, choosing instead to pin their hopes on an improving economy.

Unfortunately, the economy didn't improve – as many unemployed workers in Eastern Washington can attest to – and here we are today with a substantial budget deficit.

I voted against the House budget as I believe it is unsustainable, hits education and our most vulnerable too hard, and fails to implement any true government reforms.  Despite my “no” vote, the budget passed along party lines.

The Senate released their budget this week.  There are things to like and dislike in both budgets.  And now that both proposals are official, the real negotiations can begin.  However, it's looking more and more like we're heading to a special session.  This is maddening!  We have no business going into a special session.  We shouldn't be paying legislators overtime for a job they failed to finish on time (the legislative session costs the state about $20,000 per day).

 

Tax loophole rhetoric is just that – RHETORIC

Last week, I briefly touched on the protesters at the state Capital who continue to protest against budget cuts.  Well, they continue to show up in Olympia in various numbers.  They want higher taxes, but you won't hear them say that directly.  Instead, you'll hear them say “cut tax loopholes.”

However, the term “loopholes” makes many people think there's a mistake in the system – like something was accidental or overlooked that allows for ways to buck the system.  That's really not the case at all.

In Washington state, we don't have tax loopholes.  We have tax INCENTIVES.  The distinction between the two is important to understand because the tax incentives we have in Washington are no accident.  They were enacted deliberately for very specific purposes: to create and protect jobs.

For example, in the first 10 years after the Legislature adopted a tax incentive that exempted sales tax on manufacturing and equipment, it created 285,000 new jobs.  Those new jobs generated billions of dollars in new tax revenue.

Thousands of jobs with high wages and benefits have been created and many jobs have been saved as a result of these incentives.

What are some of the proposals to close these so-called “tax loopholes?”  Supporters want to eliminate the sales tax exemption on food, increase taxes on medical devices and insulin, extend taxes to church daycare centers, and tax employers on creating jobs in rural counties.  These proposals would hurt Washington families at a time when they are struggling most.

If tax incentives are eliminated, jobs will be eliminated.  It's that simple.  With more than 330,000 people in Washington unemployed, we don't need to put more people out of work.  Instead, I believe we need to get Washington working again.

 

How much have the protests costs the state so far?

The Washington State Patrol says the protests have cost the state an additional $50,000 in overtime pay and other security measures.  We're hearing rumors that the labor unions are going to send a thousand people a day to the Capital until the end of session – and possibly into the expected special session as well, running up the tab to state taxpayers.

A special thank you to Deanna Aeschliman from Colfax for serving as a legislative page last week.  She is the daughter of Cory and Rosemarie Aeschliman and attends Colfax High School.  If you or someone you know would like to serve as a legislative page in Olympia next session, click here for more information.

I'll keep you updated as we enter the final week of session.  It is an honor serving you in Olympia.

Sincerely,


Joe Schmick

State Representative Joe Schmick, 9th Legislative District
RepresentativeJoeSchmick.com
426B Legislative Building | P.O. Box 40600 | Olympia, WA 98504-0600
joe.schmick@leg.wa.gov
360-786-7844 | Toll-free: (800) 562-6000