Swift Action on the Budget Urged

While I've neither time nor inclination to post on everything written about the state budget in the half-week since Arun Raha dropped the hammer on revenue projections for the balance of the biennium, some stuff should be mentioned. The News Tribune says "to tax or not to tax is not the question." And here I'd just posed that question. The TNT's editorial makes several good points and should be read in full. The conclusion is precisely right:

The test of any proposal should be how well it positions the state and its citizens to recover.

On balance, as I have written here, tax hikes to preserve government-as-usual will not position Washington well for the recovery. A similar point is made in Don Brunell's column.

Raising taxes won't make consumers more confident, it won't create jobs, and it won't encourage employers to expand and hire.

We need to stimulate the private sector to lead us back to recovery. Only by increasing employment, stimulating investments and restoring consumer confidence will we find solid ground in these shaky times.

The Seattle Times editorial board supports swift, decisive action to close the gap.

[Gregoire] has done the right thing, but often slowly. This year she curbed state hiring, equipment purchases and travel.

Exactly what she should do now we do not know. A private corporation would lay people off. The state is not a private corporation, but revenues and expenses have a similar meaning.

The Times picked up Sen. Joe Zarelli's call for a special session. As the governor has rejected the appeal, the Times urges her to act on her own to pull spending down. Fine, I guess, but her ability to rewrite the budget unilaterally is appropriately circumscribed.

And for those who think the solution to the current mess is tax reform, the news from across the country is gloomy. This Wall Street Journal story points out that tax collections fell last quarter in 44 states.

The steepest decline was in volatile corporate-income taxes, which fell 19.4% across the 44 states surveyed by the Rockefeller institute. Personal-income taxes fell 11.4%, while sales taxes fell 8.2%. Roughly 80% of states' total tax collection comes from sales and personal-income taxes.

Given the circumstances, job creation and economic growth should matter much more than tax reform.