Is Washington Joining the Confederacy?

WA as cnbfederate state

Little know fact: Washington State’s original highway, I 99, is named for Jefferson Davis.

According to the Washington Post we are  one of the 29 states where tax collections have yet to return to their pre-recession heights.  Put another way, we look a lot like South Carolina or Alabama!

We also, along with the former Confederacy, rank near the bottom in our support not only for K-12 education but for higher education.  In a state with no major private university, our flagship schools, the University of Washington, is very poorly funded.

The poverty of our state budget  is difficult to understand since Washington’s core industries are doing very well.  Unlike North Dakota,  we WA yaxesdo not have the wealth that comes from oil.  We do have planes, apples, software, wheat and coffee.  All these are doing well.  This is not that different than California. where some oil is made but most of the state income comes from technology and agriculture.

The same can be said of Oregon We are a major player in the world economy as are the other Western states, yet their budgets are doing well while ours suffers so badly we can not even fund our schools.  How can this be?

Oil lucre seems not to be the answer .. look at how badly Alaska and Louisiana are doing.  Alaska, despite oil wealth, is farthest from its peak, with tax collections in the second quarter of this year down 69 percent .. presumably because the prices of oil have declined.  Despite Sarah Palin’s mantra of Drill Baby Drill, there is a limit to how much expensive Alaskan oil the world wants. Not that NEW oil is bad thing, North Dakota where oil is largely a new thing since Obama became President,  second-quarter revenues were 119 percent higher than the pre-recession peak.

A more reasonable answer is that the well being of Washington’s economy no longer relates to our tax income.

As the state legislature  deals with the court mandate that we come up with $2 billion dollars  we need to look at the tax systems in other states.  A comparison with other states would be interesting.  Illinois is up 20 percent gain and Minnesota’s collections are up 16 percent.  How do their tax systems work?

We should also look at how the state’s businesses have changed.  Agriculture is still a big deal but it is becoming a bigger deal.  Because of global warming, our climate  gives us a huge advantage over more drought prone states like Kansas (with its special problem of Brownback government) or California.   Similarly, our access to clean hydro power is huge competitive advantage for server centric tech companies like Microsoft and Amazon.   These companies, however illustrate much more difficult challenge .. Amazon, Microsoft, Costco, and Starbucks make most of their money out of state.  They pay taxes where they sell stuff, not here.



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