If I do
this, I’ll lose my next election
This excuse
is the answer given to leaders by fearful and timid legislators. For the moment
we will ignore the reality of this fear in order to focus on history.
With the
election of Ronald Reagan and the mantra of
”no new taxes”. We entered an era that closed the door on the use of
increasing taxes to solve problems.
The
Washington State election for governor in 1980 was won by a candidate who aped the
Reagan mantra. John Spellman became governor in an
era when the budget of the state was in free fall. He had control of both Houses the legislature
but was faced with an imploding state budget.
During his
first 2- year session of the legislature The governor called 6 special sessions in order
to raise the sales tax minimal amounts to cover the quarterly budget short
falls.
He also
raided millions from the teachers Pension fund and moved the state payday from
the last day of the month to the first day of the following month , in order to
pick up a 25 th month of revenue for the two year period.
Wall Street
was not amused or fooled and dropped Washington State bond rating from AA to D.
The voters were not amused or fooled either. In the election of 1982 they
narrowly voted both the Houses back into Democratic control.
Washington
States tax structure is one of the most
regressive in the country. In 1935 in
the midst of the 1929 Recession the Legislature enacted an graduated income tax
which had only two rates. One percent for most and two percent for the rich. Everyone knew
it violated the Constitutional principle that everyone should be taxed at the
same rate so no one was surprised that it was immediately was sent for review
by the Washington Supreme court.
But the
state needed money to pay it’s bills so a temporary 1% sales tax was passed.
The Supreme Court affirmed the “one rate” provision and rejected the income tax
proposal. Since then, at least a dozen times, both
Republican and Democratic have proposed
an income tax. The citizens have
rejected every single one. So today the
Sales tax is the single largest source of state revenue.
As the 1983
session began, the Democrats,who now were in control of the legislature made the decision to take bold steps to stop the decline in
revenue while repairing the destruction of teacher pensions and the Wall Street
bond downgrading which made borrowing for construction projects much more
expensive because of the undesirable bond rating.
In the
Senate the Democrats decided to pass a budget that raised sufficient revenue to solve all
the known problems with one tax vote. The howls from the members about how they
would lose if they voted for taxes could be heard from Seattle to Idaho and
from Vancouver BC to Vancouver on the Columbia.
The task of
the Ways and Means chairman was to convince his one vote Senate majority to trust him
and thus, to vote once in the two years for a huge tax increase before they saw
the actual budget. That meant that they
had to blindly trust that the money raised would be sufficient to cover the
state’s needs for 24 months AND that the things they wanted would be in the
package.
How to get
that trust was the question? The proposal was made orally but every member was
wary of what the Chairman of ways and Means said. A white board was put in the Democratic Caucus
room and the Chairman wrote up on the board, with a grease pen, the specifics
of what would be in the package paid for by the tax vote. Distrustful members
copied down what was put on the white board.
The plan was erased by the chairman every day at the end of the caucus
so no one wandering through the area would see the proposal and tell the press.
The members were so leery they never leaked the proposal until it was unveiled publicly.
It repaid
the Teachers Pension Fund and raised the sales tax 1.1% in one jump. It also raised the Business and Occupation
Tax significantly. It was the single largest tax increase in State history. It
passed by a 25-24 vote.
Shortly we got our bond rating raised and to
my knowledge, not a single member lost his or her seat if they had voted for
the bill.
Except in
very special circumstances rarely do members lose the trust of their voters for
doing what is clearly in the public interest.
Much good
public policy is lost by timid souls who fear losing their seats.
Teddy
Roosevelt said,” It is not the critic who counts; not the man who points out
how the strong man stumbles, or where the doer of deeds could have done better.
The credit is to the man or woman who is actually in the arena, who face is
marred by dust and sweat and blood; who
strives valiantly; who errs, who comes short again and again, because there is no effort without error and
shortcoming; but who does actually strive to do the deeds; who knows great
enthusiasms; the great devotions; who spends him or herself in a worthy cause;
who at best knows in the end the triumph of high achievement, and who at the
worst, if he fails, at least fails while
daring greatly, so that his place shall never be with those cold and timid
souls who neither know victory or defeat."
The Congress
of 2019 will test the souls of each and every member.
If I do
this, I’ll lose my next election
This excuse
is the answer given to leaders by fearful and timid legislators. For the moment
we will ignore the reality of this fear in order to focus on history.
With the
election of Ronald Reagan and the mantra of
”no new taxes”. We entered an era that closed the door on the use of
increasing taxes to solve problems.
The
Washington State election for governor was won by a candidate who aped the
Reagan mantra. He became governor in an
era where the budget of the state was in free fall. He had control of both Houses the legislature
but was faced with an imploding state budget.
During his
first 2- year session of the legislature he called 6 special sessions in order
to raise the sales tax minimal amounts to cover the quarterly budget short
falls.
He also
raided millions from the teachers Pension fund and moved the state payday from
the last day of the month to the first day of the following month , in order to
pick up a 25 th month of revenue for the two year period.
Wall Street
was not amused or fooled and dropped Washington State bond rating from AA to D.
The voters were not amused or fooled either. In the election of 1982 they
narrowly voted both the Houses back into Democratic control.
Washington
States tax structure is one of the most
regressive in the country. In 1935 in
the midst of the Recession the Legislature enacted an graduated income tax
which had only two rates. Everyone knew
it violated the Constitutional principle that everyone should be taxed at the
same rate so no one was surprised that it was immediately was sent for review
by the Supreme court.
But the
state needed money to pay it’s bills so a temporary 1% sales tax was passed.
The Supreme Court affirmed the “one rate” provision and rejected the income tax
proposal. At least a dozen times, both
Republican and Democratic have proposed
an income tax. The citizens have
rejected every single one. So today the
Sales tax is the single largest source of state revenue.
As the 1983
session began a decision was made to take bold steps to stop the decline in
revenue while repairing the destruction of teacher pensions and the Wall Street
bond downgrading which made borrowing for construction projects much more
expensive because of the undesirable bond rating.
In the
Senate we decided to pass a budget the raised sufficient revenue to solve all
the known problems with one tax vote. The howls from the members about how they
would lose if they voted for taxes could be heard from Seattle to Idaho and
from Vancouver BC to Vancouver on the Columbia.
The task of
the Ways and Means chairman was to convince his one vote majority to trust him
and thus, to vote once in the two years for a huge tax increase before they saw
the actual budget. That meant that they
had to blindly trust that the money raised would be sufficient to cover the
state’s needs for 24 months AND that the things they wanted would be in the
package.
How to get
that trust was the question? The proposal was made orally but every member was
wary of what the Chairman said. A white board was put in the Democratic Caucus
room and the Chairman wrote up on the board, with a grease pen, the specifics
of what would be in the package paid for by the tax vote. Distrustful members
copied down what was put on the white board.
The plan was erased by the chairman every day at the end of the caucus
so no one wandering through the area would see the proposal and tell the press.
The members were so leery they never leaked the proposal until it was unveiled.
It repaid
the Teachers Pension Fund and raised the sales tax 1.1% in one jump. It also raised the Business and Occupation
Tax significantly. It was the single largest tax increase in State history. It
passed by a 25-24 vote.
Shortly we got our bond rating raised and to
my knowledge, not a single member lost his or her seat if they had voted for
the bill.
Except in
very special circumstances rarely do members lose the trust of their voters for
doing what is clearly in the public interest.
Much good
public policy is lost by timid souls who fear losing their seats.
Teddy
Roosevelt said,” It is not the critic who counts; not the man who points out
how the strong man stumbles, or where the doer of deeds could have done better.
The credit is to the man or woman who is actually in the arena, who face is
marred by dust and sweat and blood; who
strives valiantly; who errs, who comes short again and again, because there is no effort without error and
shortcoming; but who does actually strive to do the deeds; who knows great
enthusiasms; the great devotions; who spends him or herself in a worthy cause;
who at best knows in the end the triumph of high achievement, and who at the
worst, if he fails, at least fails while
daring greatly, so that his place shall never be with those cold and timid
souls who neither know victory or defeat.
The Congress
of 2019 will test the souls of each and every member.
