The Budget Battles Begin, With Taxpayers on the Front Lines

Stateline.org reports that 13 state legislatures return to session this week with budgets troubles topping the agenda. (Budget troubles won't top the Washington legislature's agenda until next week.)

“It’s going to be the toughest year yet,” Raymond Sheppach, the head of the National Governors Association, told The Associated Press.

And then there's this:

Hanging over this year’s legislative sessions are the November elections, in which voters in 37 states will choose governors and 46 states will choose legislators. In many states, election-year politics could complicate negotiations over how to balance budgets.

AP reporter Curt Woodward writes that political leaders in Washington are looking to taxes.

Washington’s ruling Democrats are set on raising taxes to avoid deep cuts in state spending.

He outlines the usual suspects - sin, loopholes, and such, but ...

... say the Legislature wants to raise $1 billion. The quickest way to bring in significant revenue is hitting one of the state’s “big three” tax sources: Sales, property, or business and occupation, which is a gross-receipts tax on businesses.

Gregoire has singled out a sales tax increase as the most likely among those three.

Of the three, I'd agree the sales tax is "most likely," though hardly popular.

The Columbian points out another alternative - do business differently. In a Sunday editorial, the paper calls for more competitive contracting.

The capacity for competitive contracting is real and vast. Occasionally the politicians are courageous enough to expedite privatized services by passing meaningful legislation. In 2002, Washington state lawmakers passed the Personnel System Reform Act, which allowed agency managers to seek competitive bids to lower the cost of delivering services to the public. But as Jason Mercier of the Washington Policy Center pointed out in a recent essay, “little competitive contracting has occurred” in intervening years because “an agency’s contracting authority is itself subject to mandatory collective bargaining.”

Tennessee Gov. Phil Bredesen, a Democrat, recently told the Memphis Daily News that he wouldn't be looking for new revenues.

I certainly don’t feel that when people are struggling like they are now you can go back and say, ‘Oh by the way, I’d like my job to be really easier. I’ll just ask you for a bunch of more taxes.’ So I don’t think there’s much in the way of revenue creation.

One unknown for the next round is the availability of more federal money. Peter Callaghan, The News Tribune, writes that Washington is among 36 states looking for another "budgetary life preserver." The problem, he notes, is that the money always comes with strings.

The U.S. Senate is less interested in more state stimulus, however. And if Washington says it would use it to lessen the need for tax increases – as Gregoire’s budget director Victor Moore suggested last month – rather than to reduce further layoffs, the House and the president might be less interested as well.

Tough sledding ahead.