Saturday, January 8, 2011

Seattle Times Opinion: State should change how it does business, not simply cut programs

Don Brunell, the president of the Association of Washington Business, points out everywhere the State of Washington can institute systemic savings, everywhere except in his own backyard.

Asking everyone to sacrifice, change the way the state works, and not be open and honest about the role the business community has in our tax mess is at best disingenuous.

For its part, the Seattle Times gives free media space to a lobbyist, a lobby they depend on for their own special tax break that ends in 2015.

The Association of Washington Business is the biggest pig at the trough.

Spending cuts are necessary given Washington's budget crisis, but more systemic change is needed. Guest columnist Don Brunell of the Association of Washington Business suggests five such systemic changes to how the state does business.

Unfortunately, lawmakers resist such changes until the last possible minute. And when a financial crisis finally hits, it makes the necessary cuts seem even more painful. But there are systemic changes the governor and state legislators can make to get spending under control.

• First, we must reduce or eliminate existing programs and lawmakers should not add any new ones. In Gov. Gregoire's first term, the state budget increased 31 percent with higher salaries, richer benefits, 6,100 new state workers, new programs and even a new state agency. In today's economy, taxpayers simply cannot afford it.

• Second, legislators should also resist raiding dedicated accounts set up by specific taxes to fund specific programs, such as hazardous-waste cleanup. Robbing Peter to pay Paul by moving money around and deferring payments doesn't solve our long-term problems.

• Third, state lawmakers should also find more innovative ways to provide public services. For example, the state should contract out services to the private sector when it is more efficient and cost-effective to do so, ensuring proper oversight and quality controls. To make that happen, lawmakers will have to change state law to remove contracting out from the collective-bargaining statute.

• Fourth, Olympia needs to change collective-bargaining agreements with public employees. Government workers must sacrifice to the same degree as private-sector employees. So far, that hasn't happened. Originally, the governor proposed increasing the health insurance co-pay for premiums from 12 percent to 26 but ultimately announced it would be 15 percent. Most private-sector workers pay 25 percent or more.

• Fifth, shorten permitting time, eliminate duplicative regulations and reduce costs for private-sector employers. Eliminating those unnecessary costs will free employers to create jobs, which will restore economic vitality and provide more state tax revenues.

None of this will be easy, but if lawmakers take this opportunity to make real changes in the way the state does business, we will all be better off in the long run.

[Don Brunell is the president of the Association of Washington Business, Washington state's largest and oldest statewide business association.]

Opinion | State should change how it does business, not simply cut programs | Seattle Times Newspaper

Don Brunell is right, but doesn't go far enough, and completely misses a spending program that is wasteful and anticompetitive; payments to one company over another through tax incentives must end. The free market will produce the best industries and companies in this state. Paying companies through the state tax system is costing all Washington tax payers tens of millions of dollars every year.

So, in Don Brunell's priority list at the top there should be a line zero:
• Zero special tax inducements/breaks/payments (the B&O tax is the B&O tax), and the immediate repeal of all tax inducements where the state is not contractually obligated, and where the state can not show a direct return on our investment of our tax money.

That's my tax money, too, Don Brunell.
Put up or shut up, Don Brunell.

I know we could save a little money on the state side by not having to have a team of experts figuring out which tax dodge business owes or avoids, which tax rate, for which service.

Here is an idea, if YOU are doing business in Washington State then how about paying your share of taxes?

Here is 1.1 billion dollars of freeloaders:
Consultants and miscellaneous business services worth $25.2 million
Legal services worth $199.8 million
Engineering & architectural services worth $84.4 million
Accounting and auditing services worth $84.2 million
Detective and security services worth $66 million
Computer and data processing services worth $66.2 million
Management services worth $131.7 million
Trade-ins of used products worth $176.3 million
Credit agencies worth $76.9 million
Security brokers worth $77.8 million
Insurance companies worth $5 million
Insurance agents worth $101.6 million
Real estate brokers & agents worth $5.3 million
Holding companies worth $7.6 million
Precious metals and bullion worth $6.4 million
Other financial services worth $41.6 million

Total: $1.1 billion.

Are we "One Washington", or not?