Homeless shantytown
  • Washington State Archives, posted with permission
  • Homeless shantytown "Hooverville" south of downtown Seattle, 1937.
Like Josh, I was intrigued by Gov. Christine Gregoire's repeated references to the year 1935 in her Eyman-channeling "State of the State" speech.

As Gregoire told legislators on Tuesday:

This is not the first difficult time in our history, nor will it be the last. Here’s some perspective. On October 29, 1929, after eight years of unprecedented growth, the stock market took a nosedive. Sound familiar?

Just like this recession, the fallout hit Washington later than other states, but with equally devastating impact on virtually every sector of the economy. With incomes declining 44 percent by 1932 and unemployment soaring to 25 percent, well above the national average, poverty became a way of life for many...

In 1933, the Unemployed Citizens League marched on Olympia. Nearly 1,200 unemployed men from Seattle were met here by 800 police officers and vigilantes. The protesters wanted the Legislature to assess higher taxes, end foreclosures and provide hot meals for their children. Sound familiar?

In 1935, Governor Clarence Martin signed a revenue act that was the most comprehensive tax overhaul in the state’s history. After what was described as a “stormy” session, the bold reform was enacted, and that reform has endured for the past 80 years...

If the Legislature in 1935—in the midst of the Great Depression—could enact landmark change that has lasted for 80 years, then we, today, can also transform Washington State government to better serve our people for the next 80 years. Now is the time to challenge the status quo.

Having spent the last few days reading up on what happened in 1935, it's pretty clear that Gov. Gregoire is either confused about the events of that year or—more likely—willfully torturing the analogy between her proposed budget this year and the "bold reform" and "landmark change" that occurred in the budget of 1935.

What is Gregoire proposing this year? A slash-and-burn budget that will leave our state's regressive tax system firmly in place while shredding the social safety net.

What happened in 1935? Well, three years earlier, in 1932, state voters had approved a statewide income tax (ahem, 2010 voters). But, because that income tax was declared unconstitutional by the state supreme court in 1933, the governor and legislature in 1935 instituted a new scheme of statewide sales taxes to balance what, at the time, was a burdensome over-reliance on property taxes. That change created the tax system we have today.

The point is: The "bold reform" and "landmark change" of 1935 came when the governor and state legislators, in response to severe economic pain and popular pressure, decided to alter the underlying tax structure that funds our state.

Gregoire is doing nothing of the sort this year. She did support altering the state's underlying tax structure via Bill Gates Sr.'s failed income tax initiative last fall. But, after seeing it go down hard, she now praises the wisdom of the voters in rejecting any new taxes.

If Gregoire were really following the model of 1935, she would be proposing a dramatic change to what, over 80 years, has come to be a regressive over-reliance on the sales tax in Washington State. Instead, all she's talking about is downsizing, re-arranging, and cutting, cutting, cutting.