While the federal government is pouring trillions of dollars into the economy to get banks lending and people spending, Washington lawmakers are talking about new taxes on economic activity.
If you recall, King County adopted a “lifeboat” strategy in its 2009 budget. The idea was to fund certain programs for six months, while seeking new taxes in Olympia. I opposed that effort but was not joined by many of my colleagues.
We are now learning the full details of that strategy. H.B. 5433, which is currently under consideration in the Legislature, would allow King County to levy a three tenths of one percent sales tax and a six percent unincorporated utility tax for general government expenses and a seven and a half cent property tax levy (per $1,000 of assessed valuation) for transit service. These taxes would presumably close a $16 million deficit for the remainder of 2009 and a projected $40 million to $50 million deficit for 2010.
Our region and indeed the nation is going through an extremely difficult recession. According to experts, the essential problem is that banks are not lending money and the American people are not spending as they normally do. In addition, the employment rate has skyrocketed up over eight percent and experts predict 10 percent unemployment in King County soon.
Can you imagine a worse way to get people to start spending again than to tax them for doing so?
In addition, Washington lawmakers have proposed to tax the most basic services that every family, rich or poor, must pay. A utility tax would be applied to expenses such as electricity and phone bills. With people struggling to stay in their homes, can you imagine a more regressive and harmful way to help?
There is no question that King County faces extremely difficult choices in the coming year. However, government should not make matters worse by heaping an additional burden on already struggling taxpayers. If these dubious proposals get passed by the Legislature, I will be asking some very tough questions about the timing and economic consequences of these new taxes.
Reagan Dunn of Maple Valley represents the Ninth District on the King County Council, including part of Renton.
