About a month ago, Fizz featured some legislation that Rep. Reuven "We need to have a courageous conversation" Carlyle (D-36, Queen Anne, Ballard) was cooking up that would sunset all 500-plus tax loopholes in the state budget and, viewing them (accurately says the Washington State Budget & Policy Center), as budget spends, would make them (and any new ones) come up for vetting and approval—just like all budget expenditures, every budgeting cycle.

Carlyle has not introduced his legislation yet. Fizz hears Sen. Jeanne Kohl-Welles is drafting similar legislation on the senate side.

We're bringing this up again this morning because over the weekend, freshman Rep. Andy Billig (D-3, Spokane) published an op/ed in the Spokesman-Review making the strongest case yet for the kind of thing Carlyle is talking about.



Billig has spent nearly 20 years running Spokane's baseball team which explains the baseball business metaphors.

One idea grows out of my experiences during the past two decades that I have spent running a business in Spokane. When we create the annual budget for our business, the Spokane Indians, we treat any potential discount we plan to offer as an expense. This allows us to compare the value of the discounts side by side with our other expenses. We also consistently track if the discounts and promotions achieved their intended goals. It’s just common sense: This is the information we need to make smart business decisions that ensure our company’s long-term success.

But I’ve noticed that we don’t do the same thing with the state budget. As a state we give out more than 500 “tax breaks” that cost us over $6.5 billion each year, with more added every year. Most of them, like the sales tax exemption on food, make perfect sense. But some have clearly become outdated, costing taxpayers more than they benefit. With others, we simply don’t know whether they are working or not.

The lack of clarity regarding the money we spend on special tax rates and exemptions results because we don’t compare them side-by-side against the other money we spend on our kids and communities. To date, only a fraction of the state’s tax exemptions have ever even been reviewed.  We rarely confirm whether tax exemptions actually created jobs or benefited our state, so we have no idea whether we are getting value for our money.

At a time when we are considering kicking thousands of people off the Basic Health Plan, adding more kids into classrooms, and drastically reducing critical services for seniors, we need to scrutinize every dollar we dole out on tax exemptions and compare the benefits to the services we are proposing to cut.

For example, eliminating tax preferences for out-of-state coal and elective cosmetic surgery could generate over $18 million that could be used to help save the voter-approved Basic Health Plan or reduce class size. Or, the proceeds from modifying these and other unproductive tax preferences could be used to lower the tax burden on all individuals and businesses in our state.

Billig is one of 32 legislators who has signed on to legislation (introduced by Seattle Rep. Eileen Cody in the house and shoreline Sen. Maralyn Chase in the senate ) that would cut the cosmetic surgery break (along with a $50 million bank loophole and a $5 million coal loophole) to help fund the Basic Health Plan.

It remains to be seen if the legislature will step up to the plate and take a swing at the billions in tax breaks. Billig's op/ed certainly makes a good case for it.

On a related note: Angry about tax loopholes and fired up by the events in Wisconsin, today, the Service Employees International Union 925, which represents teachers, higher education staff, child care providers and k-12 staffers, is showing up in Olympia with over 300 members to demand that the legislature repeal corporate tax loopholes.

Their fiery press release says:

As we have seen in a dramatic form in Wisconsin, public servants everywhere have become the scapegoat for this budget crisis. This scapegoating is a direct attack on the middle class.  Big banks and Wall Street gamblers crashed our economy. Hardworking community members aren’t to blame—but we are paying the price.

Over 300 people will stand in solidarity with the workers of Wisconsin while calling on the Washington State Legislature to examine tax loopholes for corporations and special interests. Only 17 percent of exemptions and deductions have been reviewed by the Legislature.

Tax breaks created since 1995 will cost taxpayers $1.6 billion in just the next two years. We must take a balance approach to the budget and close money-draining loopholes.

It will be interesting to see how long they stay.