Fallout from sales tax increase would be severe in jobs, sales
We all agree that providing a quality education system for our children is a top priority and that the current system needs improvement to keep up with changing demographics and work force demands. Raising the sales tax without strong accountability is not the solution
Initiative 884 is a permanent $1 billion-a-year sales tax increase. It would raise the retail sales tax rate from 6.5 percent to 7.5 percent, making Washington’s the highest in the country. Combined with local sales taxes, consumers across the state would pay almost 10 cents on every dollar. Neighboring state Oregon has no sales tax and Idaho’s rate is 6 percent.
Raising the sales tax rate 15.4 percent would have a devastating effect on other priority issues:
# Initiative 884 would drive consumers and the jobs that go with them over the border and to the Internet. A Washington Policy Center study estimates this increase will cause the loss of 10,000 jobs. We are slowly recovering from an economic recession and still have one of the highest unemployment rates in the country.
# Initiative 884 would have a measurable effect on affordable housing. Increasing taxes on equipment, supplies and labor that go into construction would add $3,000 to $5,000 to the cost of a private home. According to the National Association of Home Builders, every $1,000 increase in the price of a home squeezes 400 families out of the housing market. Forbes Magazine has already named Seattle as the “#1 Least Affordable City in the United States.”
# Initiative 884 would have a negative effect on finding solutions for our pressing transportation needs. Raising the sales tax now would effectively preclude local governments from asking voters to approve an increase in the same tax for priority projects. Its passage would essentially doom future transportation proposals. At the same time the tax would be applied to, and increase costs of, transportation projects we already can’t afford.
# Initiative 884 would put the greatest burden on struggling families and fixed-income seniors when it is our duty to help those that cannot help themselves. The Institute on Taxation & Economic Policy rates Washington’s tax system as the most regressive in the country. Our poor and middle-class citizens already pay a higher share of their incomes to taxes than the rich.
The accountability of Initiative 884 is questionable. Even if it passes, there is no way to guarantee more money will be spent for education. The initiative says current education money can’t be supplanted but it’s unconstitutional to bind the Legislature to future spending. In the first two years after passage, an initiative can be amended by a supermajority vote of the Legislature and with a simple majority thereafter. In 2003 the Legislature used this discretion with three initiatives (I-773, I-732 and I-728). In fact, the average shelf life of an initiative is only six years.
Initiative 884 assumes that the way to improve our education system is to provide more money but makes no effort to prove this works. The language does not contain defined outcomes for programs or consequences for failure. It does not allow performance audits on the new or existing programs.
Education spending has steadily increased and we do not have corresponding increases in student achievement. Less than half the $9,400 we currently provide to each K-12 student makes it to the classroom. Before asking for more money, we should focus on reforms, targeting money into programs that work and rewarding excellent teachers. Just spending more money without real accountability will not solve the problems.
Initiative 884 has served a valuable purpose by bringing the issues of education and the economy to the forefront of debate. We need to demand that they remain priorities and work together to find solutions to the increased demands on our schools and to help families as we recover from an economic recession. Imposing the largest tax increase in state history without accountability isn’t the solution. Vote no.
Jamie Daniels is the Washington state director of the grass-roots organization Citizens for a Sound Economy/FreedomWorks and the campaign coordinator for the League of Freedom Voters PAC.