Friday, February 26, 2010

Reporter's Notebook

Paul Leonard can be reached at

“Targeted” taxes and cuts, or cherry-picking?

No one said balancing a state budget $2.8 billion in the red was going to be easy.

And indeed, legislators in Olympia are set to work through this weekend in an effort to pass budget cuts and revenue increases – i.e. taxes – to plug the deficit and keep the state on a sound financial footing through the next biennium.

These are tough decisions, and to be sure, it’s easy for office chair quarterbacks like yours truly to question all of the moves made by the Washington Legislature lately.

But I still think it’s a priority for most Washingtonians that the budget that will likely pass next month be a fair and just compromise for all of its citizens, including businesses and the workers they employ.

However, a fair and just budget may ultimately be in the eyes of the beholder.

Currently there are at least three budget proposals before both chambers that could dramatically affect the way some Southwest Washington companies do business.

First up is Gov. Chris Gregoire’s proposed one cent per ounce tax on bottled water. Together with a five cent tax for every 12-ounce soft drink, these additional revenue proposals, if instituted, would dramatically affect operations at state bottling distributors like Corwin Beverage, a longtime Clark County firm employing around 110 people.

Second is a proposal to eliminate the state’s Washington State Tourism program, drastically scaling back the chief advocate for an estimated $14.2 billion industry just as our neighbor to the south continues to benefit from a well-branded and organized Travel Oregon. That’s bad news for hoteliers, restaurant and shop owners, especially on the Washington side of the Columbia River Gorge, many of whom compete directly with Beaver State venues.

And last, we come to the resurrection of a proposal to scrap the sales tax exemption for out-of-state residents, this time in the state Senate.

Regardless of one’s position on the tax breaks, which mostly benefit Oregon residents, it’s hard to deny the likely adverse impact on Vancouver retailers, particularly those selling so-called “big-ticket” items. Further, since a similar proposal in the House exempted car dealerships operating in the state, the removal of the tax exemption has the potential to be similarly and unequally applied.

Which gets down to the crux of the matter: are these tax increases and budget cuts “targeted,” or are they, as many of our readers contend, an effort to cherry-pick victims of a historic state deficit?

In the end, the answer to that question may rest in one’s definition of what is fair and just in a time of record-low state revenue, high unemployment and a lingering economic downturn for many business owners.


In my column appearing Wednesday, I mistakenly pegged the estimated number of Clark County unemployed at 334,000. That unemployment figure was for the entire state of Washington.

The actual number of Clark County unemployed as of last December is 30,230, according to WorkSource Washington.

My apologies for the error.


Anonymous said...

Washington State seems determined to undermine and kill small business. Does Gregoire not understand that the hospitality industry has been hit hard enough? These tax increases will be the death of many small restaurants and hotels. I know they need to find additional revenues, but they really need to understand the impact they are having on small business, which is still the backbone of our economy, despite large corporate media saturation to the contrary.