Publisher's Notes: Legislature’s Aim in 2021 Should Be to Do No Harm


A pandemic is no time to raise taxes. 

While Republicans in the state Legislature would respond to such a statement with an affirmative nod, their colleagues across the aisle will face pressure to create new revenue sources as the Legislature looks to counter the impacts of the coronavirus recession. 

Look no further than Gov. Jay Inslee’s budget plan for confirmation of that. 

The Democratic executive entering his third term in office has proposed $1.3 billion in new taxes for Washingtonians.

“The state does need new, additional revenue to continue to strengthen our state’s economy,” he said last month. “This we know.” 

Inslee dismissed a reduction in the state’s budget through cuts to staff and services as impractical, a suggestion that rightly angers businesses that have been forced to cut their own staffs and budgets amid government-ordered restrictions aimed at slowing the spread of COVID-19. 

The largest new revenue proposal is Inslee’s tax on capital gains, a plan that has been called out as an income tax by critics of the governor. The new tax on profits from selling stocks and bonds would collect $1.1 billion annually beginning next year. While supporters of the plan note that it will only impact the wealthiest 2 percent of residents, it also in the process — if it makes it through the courts — opens the door for an expansion of an income tax in the future. 

Additionally, Inslee is also pursuing a tax on health care policies to pay for public health needs, a carbon cap-and-trade policy and a low-carbon fuel standard, which analysts have said will lead to an increase in fuel costs across the board. 

In short, state lawmakers, many of whom have their own tax proposals, should instead focus on the essentials in 2021, and the overarching message should be to do no harm. 

Business owners have been through hell this past year, many being ordered to close for months at a time. Many citizens of Washington have endured heart-wrenching hardships, whether it was the loss of employment or the loss of a loved one. Landlords are in many cases having a difficult time paying mortgages as renters likewise feel the financial pinch.

The last thing any of them need is another hit to their bank account. 

While there are many reasons to avoid any new taxation this session, among the most convincing is the relative financial health of the state.

Last spring, as the effects of the pandemic on the state’s coffers were just beginning to come into focus, there were dire predictions of the economic pain ahead. In May, preliminary numbers produced by the Washington Economic and Revenue Forecast Council predicted a $7 billion loss in revenue through 2023. That broke down to a loss of $3.8 billion in revenue in the 2019-20 budget cycle and an additional $3.27 billion in the 2021-23 budget cycle.

Such a gap would have likely led to even louder calls from the left for additional tax revenue met by equally loud calls from the right for deep cuts to state government. 

Fortunately for everyone, that prediction has not come true. The economy of Washington, though rattled and damaged from the changes in spending and restrictions on businesses, proved to be more resilient than predicted. 

The November update from the Economic and Revenue Forecast Council — on which local lawmakers Sen. John Braun, R-Centralia, and Rep. Ed Orcutt, R-Kalama, both serve — showed a drastically improved picture, more than $900 million above what had been originally forecasted. 

In an interview with The Chronicle last week, Braun, the Senate minority leader, said information that has poured in since November continues to show an ever-improving outlook, though financial challenges brought on by the pandemic remain. 

Inslee’s proposals aren’t all bad. His plan to reduce what businesses have to pay in unemployment taxes by $790 million this year and $1.1 billion from 2022 to 2023 represents an admirable attempt at providing much-needed aid. Likewise, his calls for providing assistance to renters so they can pay their landlords amid an ongoing moratorium on evictions could yield positive results if done correctly. 

But save the tax increases for another session. 

A pandemic is no time to expand the government’s share of the peoples’ money.