Faced with a deep state deficit and deep cuts to vital services we should look first at ending unjustified tax breaks.
Many breaks on the books subsidize a privileged few at the expense of ordinary citizens. The notion of tax fairness, that everyone pays his or her fair share for core services that benefit everyone, has been trampled under the feet of special interest lobbyists.
These tax breaks are conveniently embedded in obscure tax law and routinely ignored, yet they divert billions of dollars into wealthy pockets. As a result, essential public services like education and health care are starved for funding.
One of my top priorities is bringing accountability and public awareness to the enactment and continuation of tax breaks, often referred to in Olympia as 'preferences'.
Some preferences were created with a clear and commendable purpose such as stimulation of the economy or job creation. But it's clear not all have turned out that way in practice. Many have no stated purpose or justification at all and are nothing less than loopholes for favored, and politically powerful, special interests. Current law allows these tax breaks to continue without legislative review and re-enactment.
Every year, parents, teachers, nurses and other advocates have to fight for vital state funding, but the recipients of tax breaks get a free pass. That's not fair.
When tax breaks are reviewed by the Joint Legislative Audit and Review Committee (JLARC), they look only at a small portion of the hundreds of tax loopholes on the books, once every ten years.
In six years JLARC has reviewed just 95 of 567 special tax preferences. It has recommended that 29 of those be terminated or clarified in order to recover millions in lost revenue. But JLARC does not have any enforcement authority, and the Legislature has largely ignored its findings. Only a handful have been terminated.
Meanwhile, the problem only grows. Our state tax code increasingly resembles a slice of Swiss cheese, full of holes. In the last ten years, the Legislature has created 116 new exemptions — far more than previous decades. Tax breaks created since 1995 alone will reduce state revenue by $1.6 billion in just the next two years.
The recent passage of I-1053 makes it even harder to close tax loopholes and end special treatment. Under this new law, eliminating a tax break is framed as raising taxes and therefore requires a supermajority of the Legislature.
I-1053 unfairly shields those who enjoy their favored position from a simple majority vote to restore tax fairness. The Legislature can cut education and health care with just a simple majority vote. It should have the same ability to limit or end unjustified tax preferences.
Revenue that we're not collecting from banks, professional investors, private jet and yacht owners could be used to prevent the elimination of Basic Health care coverage for working families.
The tax breaks we give for chemical fertilizer could be used to prevent cuts to quality prenatal care for pregnant women.
Dollars we're giving away to custom software designers could prevent deep cuts to early learning programs and smaller class sizes for our kids.
The burden of proof should be placed clearly on the tax preference recipients to justify their status in front of the general taxpaying public. This would create a more transparent process identifying what they get in exchange for tax breaks.
Good tax incentives that justify their existence should be kept. Loopholes enabling a free ride to special interests should be ended immediately.
Tax exemptions need the same scrutiny as the money we spend for our kids and communities.
That's why I am supporting legislation this year to equalize our flawed tax exemption system and in turn reduce public service cuts. This is the year to stop the unfairness and now is the time to demand an end of pandering to special interests while public services are being eliminated.