State Rep. Mary Lou Dickerson of the 36th District, is surveying voters to ask what methods the state should use to confiscate more of our paychecks so the recession will not hit Olympia.
Apparently dialing back the state government's expansion of recent years is not an option, nor is asking state employees to take pay and benefit packages closer to those in the private sector. So that leaves the question of how much more do you want to send to Olympia so they won't feel your pain? Your choices are higher sales taxes, higher B&O (Business and Occupation) taxes, higher tuition, or the currently in-vogue "tax the rich" scheme.
According to the state's Office of Financial Management's most recent figures, Washington ranks 12th among the 50 states in local and state tax revenue per capita. That Office also notes that "Washington state and local government direct general expenditures per capita have generally been higher than the average for the U.S."
At the beginning of Christine Gregoire's reign, 2005 net tax collections were at $13.9 billion. In 2009 they stood at $15.6, down slightly from 2008 but still 12 percent higher than 2005. Department of Revenue records show that sales tax revenue grew by almost $740 million and business tax collections jumped 18 percent during that period. With population growing less than two percent a year, that should have provided for a healthy rainy-day fund. But state and local government grew faster than population, and now is bloated to over 227,000 "full-time equivalent" jobs according to the December 2009 US Census Bureau report. The state's portion is 122,541 jobs with average pay of $53,858 per year. Raises are scheduled for this year.
Like many in Olympia, Rep. Dickerson appears to think that government jobs should have priority over private sector jobs that, unlike those in Olympia, actually create wealth. A $1 billion increase in B&O taxes will eliminate more than 15,000 private sector jobs in this state according to a recently released study from the Washington Policy Center. London School of Economics alumni, Paul Guppy, the Center's Vice President for Research, says, "Lawmakers should not try to make balancing the budget easier by making people's lives harder."
Rep. Dickerson also repeats a fable that has become enshrined in the history books when she asks if the government should create jobs, "as FDR did during the Great Depression?" America was going deeper into the Depression even as western European countries were coming out of it. Then, as now, the Federal government left no money for consumers to expand purchasing and none to finance business expansion, the only source of real job creation.
"Taxing the rich" compounds the problem because it reduces that sector's ability to provide capital for start-ups.
As New York and California have discovered it generates far less tax revenue than the politicians predict. The targets can easily establish residency across state lines, much like John Kerry's wife who is a legal resident of Pennsylvania where taxes are lower than in Massachusetts.
In this recession we have spent hundreds of billions on "Stimulus" projects, yet last month another 22,000 jobs were lost in the private sector, according to ADP's January Employment Report. The tally so far? In the past year and a half, 6.4 million private sector jobs have disappeared. At the end of 2009, the private sector was three percent smaller than a year earlier. The Federal government was 8.5 percent larger. Rep. Dickerson is hard at work to see that Washington follows the same pattern, putting Olympia first and your pocketbook second.[[In-content Ad]]
