In the End, the Republicans’ ‘Tax Relief’ Was for Their Friends Only

Polluters, manufacturers, and investors won in this year’s budgeting marathon.

This year’s legislative session started with a tremendous hill to climb. Legislators were tasked with finally fulfilling the mandate in the state Supreme Court’s 2012 McCleary decision: to fully fund education on the state level. The move would require a major shift in the way the state spends and taxes, which, paired with the partisan power struggle in Olympia, is why it had taken so long for legislators to take up the mission in earnest. Yet, for the guarded optimists among us, the beginning of the session also came with a sense of possibility.

Under the current system—the one the court deemed unconstitutional—essential school expenses, such as teacher pay, are funded in part by local property-tax levies. The court’s issue with such taxes is that they do not provide equal opportunity for students across the state; richer communities can pay teachers more, poorer less. Another problem with these taxes, though, is that property taxes are regressive, meaning that their impact on the poor and middle class is disproportionately more than on the wealthy.

So the state had an opportunity to both introduce equity in education and to move our state toward more progressive taxation. Democrats were ready with proposals that would do just that, including a carbon tax that would impact big business and a capital-gains tax that would affect investors, a disproportionate number of whom are wealthy.

There was reason to believe that Republicans might be forced to get on board with these less-regressive taxes. They had, after all, spent a good chunk of the session promising more relief to the average voter than a laxative salesman. Taxpayers in the Puget Sound Area were of particular interest.

The focus of this quest for relief was ST3. While the budget languished, the GOP spent a considerable amount of time arguing to reverse the wishes of voters in King, Pierce, and Snohomish counties, who passed the $54 billion mass-transit measure last fall after a robust six-month debate. At issue was an increase in car tab fees. At first the lawmakers were focused only on the way car values are calculated—which they said inflated those values and thus inflated the tax. But when Democrats signaled their willingness to reform valuation, Republicans moved the goal posts, arguing that the tax rate itself was simply too high and proposing to slash it by more than half. Where the valuation reform could be seen as a clarification of what voters approved, the tax cut was an outright reversal. Republicans insisted they weren’t against mass transit; they just wanted to give our area “relief” from what we already approved democratically.

Taxpayers “absolutely need comprehensive tax relief before we end our business and go our separate ways,” Sen. Steve O’Ban, R-University Place, told our sister paper the Everett Herald. “This is the time to provide relief.”

We bring this up to point out how truly remarkable is the tax plan the legislature passed on Friday, narrowly avoiding a government shutdown. Now that McCleary is funded, the new tax plan is law, and the rhetorical dust has settled, it’s hard to see how the GOP will frame itself as the party of relief—least of all to King County taxpayers, for whom they’d expressed so much concern this session.

While we’re still learning about all the horse trading that went on while hammering out the new state budget—which includes an additional $7.3 billion in funding for schools—the broad strokes seem to be as follows: Republicans were willing to go along with the spending plan as long as investors were shielded from a new capital-gains tax; polluters were shielded from a carbon tax; and manufacturers were given a windfall 40 percent tax cut. What did that leave the Democrats with? A massive statewide property-tax increase that will eventually take the place of all those local property-tax levies in what is known as a “levy swap.” With investors, polluters, and manufacturers protected, Republicans signed off on a plan that assures Washington’s continued status as one of the country’s most regressively taxed states. And where rests the heaviest burden of this budget? On the shoulders of King County taxpayers.

According to The Seattle Times, early budget calculations estimate that the average Seattle homeowner will be paying $400 more a year in property taxes under the plan. This outdoes the tax increases dealt out by ST3—and, in contrast to the six-month debate we had over ST3, this tax hike was crafted in the dead of night with no public input whatsoever.

So, in sum, after months of attacking a voter-approved transit measure in the name of tax relief, the GOP turned around and handed out a huge tax hike whose primary function seems to be to protect the wealthy. For the rich, the relief is all theirs.

editorial@seattleweekly.com

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