A Washington economist who has crunched the numbers warns that the more
budget cuts the legislature makes, the more jobs the state will lose.
Marilyn Watkins, policy director with the Economic Opportunity Institute
says the effects of state spending ripple through the economy, from
buying supplies and hiring contractors to the paychecks state employees
spend in local businesses.
If lawmakers try to close the $2.6 billion budget gap only by cutting
more state programs and services, Watkins estimates 33,000 jobs will go
away - many in the private sector.
"We cut more than $3 billion from the state budget last year. The net
effect of that was 44,000 private and public sector jobs lost in our
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
"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