More cuts won't work: revenue needed now!

By Lynne Dodson

For the past two legislative sessions we have seen all-cuts budgets. Over the last three sessions $10 billion of cuts have been made. As we head into the special session on November 28, the state is deeper in debt (to the tune of more than $2 billion), unemployment still hovers over 9%, our classrooms are overcrowded, our most vulnerable citizens have lost services, small businesses are suffering, Boeing probably still isn’t paying federal taxes, and we’ve got Occupy groups in cities and towns from Aberdeen to Moses Lake, Bellingham to Vancouver, Seattle to Richland. Across the state the populace is demanding change.

Something isn’t working. Deep cuts, continued tax exemptions, no new revenue… clearly, these policy decisions aren’t actually doing anything to spur the economy. As we head into the special session, any legislator who is talking about following the same, old “no-new revenue, let’s cut our way out of this deficit” is using the same tools that haven’t worked so far. What’s different? Why would they work now?

But there is talk of new revenue in Olympia. Unfortunately, because Tim Eyman’s Initiative 1053 requires a two-thirds majority in the legislature to raise revenue, making it nearly impossible for the legislature to solve our revenue/budget crisis, our elected representatives and senators will need to put a revenue package on the ballot for a citizen vote in order to raise money to protect our basic and essential services.

We urge them to do so. The sooner the better because while they dither, cuts will be made and the hole we’re in will deepen. But there are better and worse ways to raise revenue for the state. The best ways are those that not only fill budget holes, but also stimulate the economy by creating jobs. When people don’t have jobs, when their wages stagnate, when they are worried about losing their jobs, they don’t spend money in their communities. They cut back, eat out less, vacation less, spend less money at their local restaurants, retailers, garden shops. And stuff doesn’t get done. Our schools, public health clinics, roads, bridges—our infrastructure falls into disrepair.

Revenue options that increase jobs are possible and smart. For example, our legislators could put a state general obligation bond on the ballot. The bond could be specifically for building infrastructure – improving our schools, public buildings, roads. This not only would put people back to work, with 20% of our retail sales tax coming from the construction industry, we could actually help grow the economy when we most need it.

Billions of dollars in tax giveaways in our state means billions of dollars that aren’t available to meet the needs of Washington residents. Last year, over $4.5 billion a year in cuts were made to education, health care, human services and other programs. People were hurt. Yet, only two tax breaks were ended, bringing in about $10 million each per year.

Worse yet, tax expenditures (loopholes) are not even considered part of the budget. Yet they are revenues that the state chooses not to collect and therefore ought to be part of budget decisions. Exposing tax giveaways, sun-setting those that don’t actually result in the creation of jobs, evaluating the actual benefit of those dollars to the state, and eliminating wasteful exemptions would restore that money to the state for rebuilding our economy.

Working people, the vast numbers of unemployed, our most vulnerable, disabled, mentally ill, our state’s children, our young women and men who worked and studied hard only now to find the American dream out of reach, those who were born here and those who came here looking for a better life, small businesses struggling to survive… we all need solutions that will enrich our lives here in Washington, not further degrade them. More cuts won’t work. We can, and we must see solutions that create jobs and build the economy. For all of us.

(Lynne Dodson is Secretary-Treasurer of the Washington State Labor Council, AFL-CIO. She’s also a member of PSARA.)

North Dakota bank a model for our state

By Rap Lewis

Guess which state has the nation’s only state-run bank.

Now guess which state is not running a budget deficit despite today’s terrible economic climate.

If you guessed North Dakota – Bing

Since 1919, the state-owned Bank of North Dakota has faithfully lived up to its mission: To promote the development of agriculture, commerce and industry in North Dakota. To carry out that mission, the bank works cooperatively with other financial institutions to provide the necessary funds.

In the process, Bank of North Dakota makes a profit. In 1945, it began transferring part of that profit to the state’s General Fund. Since then, its capital transfers have become the norm, adding $500 million to state revenue. As a result, while other states (including Washington) are floundering in debt, North Dakota’s state budget is balanced.

And the bank’s wholesome lending practices have a good deal to do with the state’s unemployment rate, among the lowest in the nation.

The bank has bipartisan support, but North Dakota is a strongly Republican state. Bank of North Dakota is administered by the governor, the attorney general, and the commissioner of agriculture – all Republicans.

The broad range of its financing programs helps to explain its popularity: It provides farm and ranch financing, small business loans, and loan funds for community, rural and regional development.

In 1967, Bank of North Dakota made the nation’s first federally-insured student loan. It continues today to provide a variety of loans for students seeking post-secondary education.

The bank was born to address the crisis in North Dakota agriculture in the early 1900s. At that time, grain prices were suppressed by out-of-state grain dealers. Prices of farm supplies soared. So did the interest rates on farm loans. By 1919, state ownership and control of marketing and credit agencies was widely demanded. The legislature responded by establishing Bank of North Dakota and the North Dakota Mill and Elevator Association. They continue to flourish today.

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Iraq and Afghanistan ‘are making you poor’

HR 5353 is a bill that ought to be enacted right now, but probably won’t even get a hearing. Introduced by Florida Rep. Alan Grayson, it’s called “The War Is Making You Poor Act.” Its purpose, says Grayson, is “to show people in a real and concrete way the cost of these endless wars” in Iraq and Afghanistan.

Grayson points out that next year’s budget allocates $159 billion to perpetuate the occupations of those two countries. Grayson’s bill would eliminate the $159 billion for war and use those billions instead to eliminate income taxes for everybody’s first $35,000 of income -- $70,000 for couples. And there’d be $15 billion left over to help pay down the national debt.

“The costs of the war have been rendered invisible,” Grayson says. “There’s no draft. Instead, we take the most vulnerable elements of our population and give them a choice between unemployment and missile fodder… We don’t even put these wars on budget; they're still passed using ‘emergency supplemental.’

“Tell Congress that you like ‘The War Is Making You Poor Act.’ No, tell Congress you love it,” Grayson urged.