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Thursday, April 24, 2003
Measure tax deals
Facing difficult service cuts in a budget nearly $3 billion in the red, some legislators are eyeing existing tax breaks and resisting new ones.
The Republican-controlled Senate wants to extend some tax incentives for high-tech and biotech companies another 10 years, even though the incentives don't expire until next year. The Senate also proposes $116 million in new tax breaks as incentives to economic development.
There is a delicate balance between the desire to avoid spending cuts and the fear of further weakening an already faltering state economy.
Together, the state sales tax and the business and occupation tax produce three-quarters of all revenue for state government. As Republican Senate Majority Leader Jim West puts it, "As our economy goes, so goes state government."
Yes, a strong economy supports a healthy state government. But that's not the question. The issue is whether state tax incentives bolster the economy. Before we grant tax incentives a decade long sinecure, we should know if they're working. House Bill 1869, which would require performance audits of such tax preferences, passed the House 59-38, yet the bill never made it out of the Senate Ways and Means Committee. Chairman Dino Rossi, R-Sammamish, says he rejected that approach over its $1 million price tag. Instead, a Senate floor amendment calls for "reviews" of tax incentive effects every five years.
Not good enough. The House should make performance audits a condition for tax breaks for business. Those who support performance audits for state spending should also support accountability in tax policy.
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