March 4, 2014
It's pretty embarrassing.Two years ago, the Supreme Court ruled that we're failing in our "paramount duty" as a state to fund a quality education system for all our kids. The Court said legislators need to fix education - and soon.
The state House's budget released by Rep. Ross Hunter last week proposed to close four tax loopholes worth $200 million per two-year budget cycle and devote the funding to education. In particular, the House closed the most egregious tax loophole of all: the Big Oil tax loophole, which costs taxpayers more than $59 million. If anything, the House was a little cautious, but their proposal is clearly headed in the right direction.
That brings us to the Senate, where Republican Sen. Andy Hill of Redmond is the budget writer. Unlike Rep. Hunter, Sen. Hill didn't close any tax loopholes, and incredulously, he actually created or extended 18 other loopholes. Instead of raising money for education, Hill's 18 tax loopholes will cost taxpayers $87 million.
There are currently more than 650 tax loopholes on the books in Washington. Yet, somehow Sen. Hill couldn't find a single tax loophole that was worth closing. Does Big Oil really need a $59 million tax loophole more than our kids need smaller class sizes? Do Prescription drug wholesalers need a $34 million tax loophole more than our teachers need raises? Do out-of-state shoppers need a $61 million tax loophole more than our classrooms need books and supplies?
It's sad to say, but Sen. Hill's budget prioritizes every one of these 650 tax loopholes over funding for our kids' classrooms.
At least Sen. Hill has strong data to justify protecting all 650 tax loopholes, right? Unfortunately, the answer is no. According to Rep. Reuven Carlyle, the Chair of the House Finance Committee, we have detailed information about the recipients and benefits for fewer than 5 percent of these tax loopholes. Rep. Carlyle points out that the legislature has created hundreds of new tax loopholes over the years. However, legislators have no clue if each and every tax loophole is an effective use of tax dollars because the loopholes lack oversight and transparency.
Rep. Carlyle drafted a bill - HB 2201 - to address this very issue. It would consolidate multiple reports into a single "Tax Accountability Report," increase the tax loophole data collected by the Department of Revenue, and release information to the public about corporations that receive more than $10,000 in tax loopholes.
The state House passed this common sense bill on February 18 by a vote of 52 to 45. But now the bill is stuck in the Senate because - get ready for it - Sen. Hill won't hold a hearing on the bill. The same Senator who refused to close any tax loopholes and added or extended 18 more is also the roadblock to increasing oversight and reforming the tax system. Is Sen. Hill representing the families and students of Washington state or corporate special interests?
Transparency and accountability for tax loopholes seems like a small ask. We should know whether or not these corporations are paying their fair share and if their special treatment is actually benefiting the public. An economy that works for everyone depends on it. But right now, the public is completely in the dark about what these corporations pay.
Let's be clear: some of the biggest recipients of tax loopholes are not hurting for cash. Boeing stock hits all-time high. Microsoft profits beat forecasts. CenturyLink profits rise. Facebook profit soars. The corporations that profit the most from our roads, our energy infrastructure, and our air and water should pay their fair share to the people of Washington. At a minimum, we should know how much corporations receive in tax loopholes and if they actually resulted in new jobs and businesses.
Is that too much to ask, Andy Hill?