business backgrounder | budget
You Can’t Tax Your Way Out of a Recession
State revenues have taken a major hit, and “everything is on the
table,” one key budget writer says. But adding new tax burdens
on struggling businesses is not the way to go, advocates say.
Andrew Lenderman
The coronavirus pandemic has brought the extraordinary growth of Washington’s state revenues to a sudden
stop. The lessons of the Great Recession offer a way forward, and new taxes are not the solution.
At A Glance
State lawmakers say everything
is on the table as they attempt to
balance the budget in the
wake of the coronavirus.
Lessons from the Great Recession
a decade ago offer practical
solutions to move forward.
The pandemic continues to
cause uncertainty about the
future of the economy.
AWB is calling on lawmakers
to help businesses which are
struggling to keep their doors open
and rebuild the economy.
Much of Washington’s state budget surplus was swept away when the coronavirus washed over
the country like a sudden thunderstorm.
The state’s fiscal outlook was extraordinarily sunny for years thanks to strong population
growth and a booming economy in urban areas, at least. State spending grew more than 79% over
the past decade, while population grew about 12%, the Washington Research Council reports.
It didn’t last. About 90 days after the coronavirus shuttered parts of the economy, officials
were predicting an $8.8 billion state budget shortfall for the next two budget cycles. The current
operating budget of about $53 billion is $4.5 billion short, or roughly 8%, already.
38 association of washington business