Published in The News Tribune, August 4, 2011
Which is better for our country do you think, low taxes or big government?
According to Republicans in Congress, this question captures the essence of our national financial dilemma.
The suggestion that each of us must choose between more money in our pockets on the one hand, and a bloated unresponsive government on the other is politically astute, but also deceptive and irresponsible. Continue reading
Published in The News Tribune January 25, 2011
Budget woes are coming home to roost in Tacoma. First came the announcement from Governor Gregoire that she wants to close the State History Museum in order to save $3 million. Then, Tacoma Public Library announced it is closing two of its branch libraries. The latest news comes from the Tacoma School District – Foss High School is being placed on the chopping block in order to save $2 million.
Given that all of these government entities are required by law to balance their budgets, cuts are inevitable. But are these the right ones to make? I won’t pretend to know the answer to that; but I think we can agree on two priorities. Continue reading
Published in The News Tribune December 2, 2010
Despite front page doom and gloom on the state budget front, my column last week argued that things aren’t quite so bad. Sure in the weeks ahead, we’ll suffer more budget cuts as the projected revenue for the rest of the fiscal year is once again falling short of what was previously forecast. .
But looking ahead, the Office of Financial Management (OFM) is forecasting record revenue for the next biennium – a full 16 percent above revenue expected this biennium. By comparison with these last two years, the next biennium sounds like a piece of cake. Perhaps with the exception of Tacoma’s City Manager, who among us wouldn’t leap for joy if told that our income was going up 16 percent? Continue reading
Published in The News Tribune October 27, 2010
It’s the Innovation Era! Creativity and ideas are what drive economic growth these days, not strong backs and the luck of geography.
So we should be especially interested in knowing what promotes “innovation” — and conversely what inhibits it. If you listen to many opponents of the state’s income tax initiative (I-1098), an income tax on the wealthiest Washingtonians will do the latter.
“I-1098 would significantly harm the state’s ability to attract new businesses” is a common complaint. Another critic writes that I-1098 harms firms “at the heart of the ‘innovation economy’”.
There may be good reasons for opposing I-1098, but that it will stifle innovation is not one of them. Continue reading
Published in The News Tribune August 15, 2010
Should we be upset that Congress has just promised Washington an extra $526 million? Not I nor, I think, will others whose kids go to our public schools, who use Medicaid for health insurance or have a parent in a nursing home, or who otherwise support the wide range of services the state provides: This money will help assure their continuation.
According to Richard Davis, however, we would be better off without this additional federal dollars (“We missed a chance to really fix the state budget”, TNT 8/11). Basically, Davis believes this windfall has allowed elected officials to temporarily avoid the hard choices ahead. Continue reading
Published in The News Tribune, March 9, 2010
Peter Callaghan noted in his column (“Instead of guessing, we could ask our economist about tax increases”, 2/21/10) that elected officials in Olympia are throwing out dueling claims over the effect new state taxes will have on the economy. He asks “Would it cripple a halting economic recovery? Would deeper budget cuts do the same?”
The truth is, neither cuts in public spending nor tax increases are ideal in a recession as both reduce demand for goods and services (and hence employment) in the economy. However unlike the federal government – which can rely on deficit spending during recessions – the state government must choose cuts, new taxes, or a combination of both. Given this choice, deeper cuts in spending on investments to education, health care and infrastructure improvements would be the worst option. Continue reading