Please CALL GOV. INSLEE: 360-902-4111 on Thursday, July 6!
Parents are asking Gov. Inslee to veto a huge new tax cut for businesses that was created in the budget deal.
Here’s the story: Even as legislators failed to fully fund public schools, they added a section to the funding bill (SSB 5977) that reduces the Business & Occupation Tax (currently 0.484%) for manufacturers to Boeing’s 0.2904%. That’s a 40% reduction in this business tax rate and it could cost the state as much as $40 million a year. (For perspective, the state could fully fund the Breakfast After The Bell program for just under $3 million a year.)
Please call Governor Inslee (360-902-4111) on Thursday, July 6 and ask him to to veto this new tax cut. Doing so wouldn’t require vetoing anything else. This tax cut never never got a hearing in the House Finance Committee–there’s no way to justify this.
If you want some talking points for your call or email, here is a letter that WPD sent to Governor Inslee’s Chief of Staff and Director of External Affairs urging him to veto this tax cut:
Dear Mr. Postman and Ms. Smith:
We are writing on behalf of Washington’s Paramount Duty’s 10,000 parents and public school advocates. We urge Governor Inslee to improve the health and sustainability of the recently-approved funding for public schools by vetoing the section of SSB 5977 that reduces the Business & Occupation (B&O) Tax rate for manufacturers to 0.2904 percent from the current rate of 0.484 percent. This tax cut, costing at least $40 million per year, leaves the state government with less flexibility and resources to fund our schools, especially in the event of an economic downturn.
Both the content of the tax cut and the process by which it was included in the budget provide a strong justification for veto action.
We need only look at the State of Kansas to see the disastrous impacts of these kinds of corporate tax cuts. When the Governor of Kansas signed major business tax cuts into law, the result was a nationally-known disaster for the state’s schools and even the state’s economy.
We share the legislature’s desire to help boost the rural economy. But we also believe one of the best ways to do that is by fully and amply funding their public schools. It may be possible that this tax break may ultimately benefit schools and rural communities. We have no way to know whether that is true, because no analysis was conducted on this proposal. There is no fiscal note.
Instead, as the Seattle Times demonstrated, this tax cut was added at the very end of secret negotiations. This tax cut is a major change to our state’s revenue system. It should have been proposed, analyzed, and debated in public. Perhaps this proposal would have been a good idea as part of a larger plan of tax reform. It is not a good idea as something included at the 11th hour.
We urge you to veto the relevant section of SSB 5977 and ask the legislature to revisit the manufacturing tax cut in full public view, with rigorous analysis of the proposal and its fiscal impact, particularly on our still-underfunded public schools.
President, Washington’s Paramount Duty
Vice President, Washington’s Paramount Duty