A Tale of Two Budgets

By Josh Feit April 2, 2009

With the devastating budget news out of Olympia these days—a $9 billion shortfall—the call to find new revenue (raise  taxes) is understandable. With the exception of the gas tax, which doesn't aid the general fund because it's locked to the transportation budget, the state hasn't raised taxes in years.

And, as economic think tanks like the Washington State Budget & Policy Center have been arguing for years (and it's finally getting some traction from powerful people in Olympia like Senate Majority Leader Sen. Lisa Brown), this is a revenue problem not a spending problem.

Indeed, as WSB&PC has pointed out—state spending as a percentage of personal income has remained flat, hovering around 6 percent, for over 10 years. In short:  Despite what Republicans have argued, government has not grown. 

But what of King County? Do they have a revenue problem? I count nine tax increases since 2006: sales tax for transit; sales tax for mental health; property tax for parks; property tax for open space; property tax for veteran services; property tax for Medic 1; property tax for crime lab work; property tax for flood control; and property tax for ferries.

The County's strategy (as opposed to the tax-averse state legislature)  was to pass those earmarked taxes so they wouldn't have to swipe money from the general fund to pay for basic services. But now King County wants to raise a utility tax—a 6 percent tax on everything from sewers to cell phones—arguing that if they don't, basic services will get walloped.   

But without the structural deficit problem that the state legislature has, why is King County in the red right now? They're talking about a $50 to $6o million hole.

Their budget has expanded about 43 percent—$3.5 billion to $5 billion since the 2006.  That rate of increase is nearly 50 percent bigger than the increase at the state level over the same period. 

I don't get it.

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