Watkins says every dollar of state spending generates just over $1.40 in economic activity – more than half of that in the private sector. That’s why the Economic Opportunity Institute report suggests raising revenue by expanding the state’s tax base before cutting more from the budget.
According to Watkins, this legislature faces a real turning point: It could decide to expand the state’s tax base. Until now, lawmakers have been hesitant to tax services or take away corporate tax breaks, saying businesses sometimes need incentives to stay in Washington. Watkins says public pressure – and this year’s grim financial picture – may change that.
"This is a time when we can act, when there is the political will and the understanding among voters to take those actions to expand the tax base, so that we can maintain – and even improve – our vital public services, like education and health care."
The report, "Creating Jobs & Boosting Our Economy: An Action Plan for Washington’s 2010 Legislature," is available at www.eoionline.org.