Budget Report, Part 3: "The People Whose Business Practices Got Us into this Mess in the First Place."

By Josh Feit December 11, 2009

At a press conference organized by a coalition of social service providers on Wednesday, Jerry Reilly, spokesman for the Elder Care Alliance, said the $700 million that Governor Chris Gregoire vowed to seek in new taxes to restore cut programs wasn’t enough.

“Seven-hundred million dollars is nowhere near where we need to be,” Reilly said.

Seven hundred million, for example, will not buy back the adult day care that 600 seniors will lose—a senior health program for which Reilly advocates.

Even if the state generates $700 million in new taxes, there's still likely to be around $1 billion in cuts: There's a $2.6 billion shortfall and Gregoire is planning to raise $700 million in new taxes and make $900 million in transfers—leaving $1 billion to cover.

Reilly had a suggestion of where to find the $1 billion: Tax loopholes and exemptions for "professional services."

He's right. The exemptions for white-collar services include sales "tax preferences," e.g., exemptions from the sales tax for white-collar business services, totaling $833.9 million and sales "tax preferences" for a subset of the "professional services" category, financial services, totaling $322.3 million (full list of exemptions below the jump).

Nick Federici, the outspoken low-income advocate for the Washington Low Income Housing Alliance (a member of the coalition with Reilly), sums up: "The securities broker exemption, $77.8 million per year sales tax break, should be closed. Why should they continue to get a free pass from sales taxes? ... The securities industry are the people whose business practices got us all into this economic mess in the first place."

Consultants and miscellaneous business services worth $25.2 million

Legal services worth $199.8 million

Engineering & architectural services worth $84.4 million

Accounting and auditing services worth $84.2 million

Detective and security services worth $66 million

Computer and data processing services worth $66.2 million

Management services worth $131.7 million

Trade-ins of used products worth $176.3 million

Credit agencies worth $76.9 million

Security brokers worth $77.8 million

Insurance companies worth $5 million

Insurance agents worth $101.6 million

Real estate brokers & agents worth $5.3 million

Holding companies worth $7.6 million

Precious metals and bullion worth $6.4 million

Other financial services worth $41.6 million

Total: $1.1 billion.

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