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All budget cuts are not equal

January 23, 2011

Recently I asked the Office of Financial Management to crunch the numbers of how taxes and expenditures flow in our state: At a high level who pays taxes and who receives the benefits. Asking for the data–and prodding for a robust public dialogue about the policy and political implications–unleashed thoughtful but pointed criticism from no less than the Seattle Times as our state’s paper of record. It’s hard not to sense, however, that many of those who consider the data to be provocative doth protest too much.

First, the facts. Six counties contribute a whopping 75% of the state’s taxes and eight are ‘net contributors’ of taxes while 31 are ‘net recipient.’ In a overarching generalization with exceptions, the political disposition of those 31 ‘net recipient’ counties seem to lean Republican while the six ‘net contributor’ counties might be seen to lean Democratic. The 31 are mostly rural while the six are more populated.

This isn’t the real issue or even the reason I am promoting a robust public dialogue. My real goal is simple: As we make substantial reductions in state spending, we must break free of the stale, rigid political cliches and recognize that we cannot cut our way out of this Great Recession.

The only long term way out–the only long term pathway–is private sector economic growth.

And in order to rejuvenate our economy, we must look to aggressively reinvest in the strongest part of the economic engine itself. While it clearly makes the institutional infrastructure of Olympia uncomfortable, the literal truth is that Seattle and King County are the economic fuel of Washington State.

Yes, we are “One Washington.” The friendly and vibrant tension between East and West, Democrat and Republican, rural and urban is as old as our nation itself. It’s part of our fabric and ensures a robust public dialogue about issues and ideas. Our diversity makes us stronger.

Still, during this extraordinary time when ‘everything is on the table,’ we must ask why it is continually acceptable for those who are stridently opposed to government spending to receive radically more than they pay in taxes without consequence or shame? All the while, those who pay more into state coffers than they receive are openly criticized as irresponsible big spenders.

The irony is not lost on anyone but when it’s actually pointed out with cold hard data, the gentle political dialogue of state government shifts uncomfortably in its chair.

Why is it acceptable for some counties, for example, to receive $2 or more for every dollar they send to state government year in and year out and yet vote against every tax imaginable without grasping the implications? I may be accused of proposing to “punish” counties for voting against taxes, but surely those counties should feel the honest, true and legitimate externalities of implications for their policy positions. That is not “punishment,” it is courageous honesty that is outside of the comfort zone of our state’s current political discourse.

By accepting the status quo and reducing spending across the board or close to it–without regard to the actual drivers of economic growth–we are shielding net recipient counties from feeling the true, objective, honest implications of spending reductions that they themselves voted to implement. This allows legislators from those areas to have the hypocritical luxury of voting against all taxes regardless of merit, forcefully criticizing those who disagree as irresponsible big spenders, all the while cashing extremely generous subsidy checks in education, health care, housing supports, transportation and every other category of spending.

And by spending so much money to mask the real effects of these reductions, we are hurting our ability for One Washington to pull ourselves out of this crisis by hurting the economic engine of the innovation economy–the fuel of our economy–more than we should.

If we slash the programs, systems and higher educational infrastructure that disproportionately drives our economic growth we will wallow in the Great Recession. If we bend politically to first protect the disproportionately high subsidy programs and funding for areas that do not generate strong economic activity, we will wallow in the Great Recession. If we don’t invest in our areas of strong economic forces–trade, global health, higher education, biotech, biomedicine, software, aerospace and so much more–we will wallow in the Great Recession.

And so in making reductions in state spending, we must have the courageous honesty to acknowledge that no non-political enterprise, business, non profit, no other large entity would make reductions based solely upon the location or political influence of programs alone. We must make budget reductions wisely and reinvest scarce tax dollars in those areas of strong economic activity that will regenerate economic strength. We must feed our areas of growth to regenerate our collective economic engine or we will fail.

When Ford Motor Company was rebuilding from near-bankruptcy, did they invest in their low-margin brands? Of course not. While counties and people are not cars, and the soul of a just and moral society requires more than cut-throat business decisions, we must also recognize that it is decidedly un-conservative and unwise business practices to redirect investment dollars into those areas that do not produce the most economic activity.

For example, today in Olympia one of the fiercest political battles is whether the make reductions in levy equalization, an education subsidy program for property poor districts that now cover 231 of 296 school districts. It is the ultimate redistribution of wealth and is about equity, not efficiency. And I support it. But I do not support treating levy equalization as a holier than thou, untouchable monument to political correctness. It is a rural subsidy program that attempts to recognize that property poor districts are at a distinct disadvantage in funding public education. No more and no less. But why do we allow the recipients to make the ‘equity’ argument in levy equalization while they simultaneously propose to eliminate Basic Health Care, Disability Lifeline and every other ‘equity’ program the state has created? Equity for me but not for thee.

We continue tax exemptions for zinc mines in Pend Oreille County and coal mines in Lewis County while we devastate the University of Washington’s economic engine that generates hundreds of times the economic return on investment for taxpayers. I’m not surprised at the policy given the nature of our political dynamics, but I also am no longer willing to be be party to the lack of honesty or transparency with the public about it.

Last year on the House floor I counted numerous times when various legislators from net recipient counties pointedly and aggressively criticized the operations, transportation and capital budgets for projects “that can be seen from the Space Needle.” I can think of few instances when a legislator from an urban district took to the same floor to suggest or even imply that, in truth, the dollars flow the other way.

I am, of course, most of all disturbed by what I describe as the moral inconsistency of those who claim we must “reduce the footprint” of state government but who fight relentlessly for programs in their own districts regardless of financial return on investment. It is the natural disposition of a citizen legislature. Yet for me as a representative of a ‘net contributor’ district, city and county, I hope I am entitled to at least express genuine frustration at the lack of objectivity in our spending reductions.

To be crystal clear: I am not arguing that the 36th District, Seattle or King County–or other urban areas– should be shielded from the negative effects of necessary spending reductions because we are net contributors of taxes in every category of state revenues. But I am arguing that we should not experience reductions that are completely divorced from the proven, uncomfortable (for many) reality that Seattle and King County are the economic engines of the State of Washington.

Olympia denies it everyday, but without a healthy economic infrastructure and educated workforce for innovation in King County, Snohomish County, Pierce County and other economic centers, our state’s economy would literally implode.

There are those who may take one sentence from this broad-based post and claim that I’m a big city elitist arguing for money for my own special projects and interests, but that misses the spirit of honesty I’m trying to bring to a very difficult dialogue about how our taxes and spending decisions are made. We need thought leadership that brings our economy forward during these difficult times. We need a willingness to raise tough issues and question the institutional grip of the status quo that gets uncomfortable too easily. We need a willingness to risk being wrong. I can’t do this job as a part-time citizen legislator, and take so much time away from my family, if I’m unwilling to take that risk.

We are so much more than what we’ve become.

Your partner in service,

Reuven.

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16 Comments leave one →
  1. Kathy permalink
    January 23, 2011 9:44 pm

    I appreciate your bravery and honesty.

    Washingtonians failed (miserably) in their civic duty to provide for our citizens- specifically, refusing to pay a FEW extra cents for candy and bottled water. Absolutely ridiculous.

    The state is failing its duty to amply fund public schools- and we have a citizens who refuse to pay a few extra cents for candy and bottled water.

    We have citizens that will go without health care, while voters refuse to pay a few extra cents for candy and bottled water.

    If Washingtonians atleast agreed to pay a few cents for candy…I might feel differently. Yet, our citizens have shown a complete disregard for education, health care etc. etc.

    Keep up the good fight. Let them feel uncomfortable. Let them feel some pain. Our citizens should be ashamed of themselves.

  2. Alex permalink
    January 24, 2011 12:00 am

    Preach it brother! Exactly the kind of stuff people need to hear and talk about!

  3. Jon permalink
    January 24, 2011 6:57 am

    As one of your constituents, thank you so much for having the courage, honesty and just plain decency to speak uncomfortable truths and call out the hypocrisy that has been allowed to fester for so long around issues of taxation and spending in Washington.

  4. Tyler permalink
    January 24, 2011 9:33 am

    Thank you for saying this loudly! Seriously, this made my day. Keep pressing the issue, keep talking about this. Go on the conversation, write an op-ed for newspapers in Eastern Washington, Republicans need to understand that this is what they are asking for.

  5. Amy permalink
    January 24, 2011 9:52 am

    Thank you for articulating the issues so well and being willing to push us beyond the normal range of discussions. You have my support!

  6. Michael permalink
    January 24, 2011 12:25 pm

    Thank you for making this point! I am tired of the hypocrisy in our state. It makes no sense for people who consistently vote against taxes to receive a disproportionate benefit from taxes.

  7. Emily permalink
    January 24, 2011 1:37 pm

    Thank you!!!

  8. Jackie permalink
    January 24, 2011 2:15 pm

    Thank you for making this point so clearly.

  9. Carolyn permalink
    January 24, 2011 2:56 pm

    YES!!!!!!

  10. GreenwoodDon permalink
    January 24, 2011 3:33 pm

    I like what you are saying., Reuven. I really do.

    I like the principle of it……but what’s so hard for me to swallow, is whether there is anything genuinely non-partisan about your stance.You close your posts with “we are so much more than what we’ve become”, but it is EXTREMELY difficult to get past the tone of partisan finger-pointing, illustrated even further with the choir of tax-and-spenders in your comments forum, quick to incriminate Republicans and “Eastsiders”.

    I know you say your motivations are pure, but there’s a thin veil wrapped around this piece, and your contempt for the events of the last election are showing through.
    In my humblest opinion, we are so much more than this, right? Lest we forget, since King County DOES HAVE the highest population, there were more voters here voting on state initiatives than any other county in the state.

    I digress from my appreciation for some of your ideas, so let me take aim.

    I appreciate your “number crunching” and putting everything on the table.
    I DO think there needs to be honest dialogue about this and I do think that Republicans in this state probably don’t want the public to know how many state-subsidies are floating their way in their districts. I SUPPORT YOUR INSATIABLE THIRST FOR TRANSPARENCY. I think you have been doing an outstanding job fighting for that.

    The real controversial underlying truths that I take out of your argument is one of demographics, geography and smaller, localized government representation. I truly appreciate that you have brought some of these things to the table, whether you would have liked to or not. Let’s face it, most Metropolitan areas started from major ports or trade routes, thus having built population, infrastructure and education fastest over time. Let’s not marginalize or even degrade other counties without considering their geography and the demographic evolution in those counties.

    Buried underneath the partisan overtones of your argument seems to also be an “under-the-surface” theme to counties being more self-sustaining and more dependent on local, county government. I know you state this isn’t your motive, but “give it up or shut it up” is softly implied. After giving it much thought, I quite support this concept as well. As long as this type of direction were embraced by the voters of the state and the state were to amend the Constitution in the proper manner– it only works out better for citizens when their government representation becomes smaller and more localized. Although this could open all sorts of interesting concepts in fractionating state government (hello splitting the state in 2 again!!!), I say bring it on. It would be interesting and exciting to watch that debate unfold.

    But the chances of undoing the social indoctrination of the Nanny State (especially in a state like Washington) is a battle unlikely to go anywhere.

    What’s humorous to me is that so many people still don’t get that so many Republicans out there are truly “big government” advocates, regardless of their rhetoric. Although I appreciate you diagramming and illustrating this for your Liberal constituent base to throw tomatoes at, many of us (Libertarians, Constitutionalists, Green Partiers and Independents) already know that there isn’t much that separates Republicans and Democrats when it comes to deficit spending.

    -Best

  11. phil permalink
    January 25, 2011 12:48 pm

    Thank you.

  12. Philip permalink
    January 26, 2011 5:29 pm

    Now you’re getting somewhere, instead of grandstanding about technology in government without actually saying anything of substance. I like your take on this and I’ll be interested to see where you take it.

  13. David Breiger permalink
    February 2, 2011 2:56 pm

    Thank you.

  14. April 14, 2011 2:56 pm

    Great thnkinig! That really breaks the mold!

  15. April 14, 2011 9:32 pm

    O86Fut mrgtrhwxxxhk

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  1. Noted in brief – 1/30/2011 | Jon Stahl's Journal

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