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Monday, January 30, 2012

Economy / Olympia Credit Agencies Downgrade Washington's Credit Outlook Due to Structural Revenue Shortfall

Posted by Goldy on Mon, Jan 30, 2012 at 5:20 PM

Ratings agencies Fitch and Moody's both recently downgraded Washington state's credit outlook from "stable" to "negative," not due to out-of-control spending, but rather, a steep revenue falloff, and a lack of flexibility to fix it. In fact, rather than demanding more budget cuts, Moody's specifically lists "implementation of large budget reductions over the past several years" amongst Washington's "credit challenges."

The outlook revision to negative from stable reflects the magnitude of the revenue falloff that continues to challenge the state as it struggles to recover from the recession; ... Frequent voter initiative activity adds budget challenges although the state legislature has a history of responding effectively to maintain budget balance. As a state with heavy dependence on sales tax receipts and no personal income tax, Washington's revenues have been hit hard by the negative impact of the recession on consumer confidence.

I know Republicans and their surrogates on the editorial boards insist that this is merely a spending problem, but it's not. It just isn't. Our budget problems are due to a structural revenue deficit, pure and simple. And if we don't do something to fix it, it could soon start costing us hundreds of millions of dollars a year in higher interest rates.

Comments (18) RSS

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This same rating agencies that did such a great job rating mortgage backed securities? Thanks for the laugh Goldsteinberg.

Posted by Sigma Alpha Mu Prez on January 30, 2012 at 5:40 PM

let's tax top earners!

let's make companies pay taxes fairly! (google microsoft b&o tax)

let's end subsidies for tech industries that don't need it!

wait! no! let's raise the sales tax! winner!

everyone in this state's political system is fucking stupid or, more likely, just old fashioned corrupt.

Posted by Swearengen on January 30, 2012 at 5:50 PM

pppsttt: Goldy you got a typo: "I just isn't" should be "it just isn't"

Posted by ryanayr on January 30, 2012 at 6:15 PM

How's that tunnel financing plan looking now? Oh wait, we still don't have the details? Just add a billion or two onto the initially projected pricetag. Still happy we decided to just "move forward" and "build something already?"

Posted by SamClemens on January 30, 2012 at 6:18 PM

Let's not rely on Goldy to spoon feed you every thought on this.

Glen Anderson (R) is THE sponsor on a House Bill replacing the B&O tax with a flat Income Tax.

HB 2744

It is true, the Republicans bullshit that this is a spending problem does not show up in the final analysis by people that count, and grade. They need to wake the fuck up.

Posted by MrBaker

on January 30, 2012 at 6:20 PM

@4, yes.

Posted by MrBaker

on January 30, 2012 at 6:24 PM

your socialist welfare state is collapsing.

starving the beast will kill the beast.

a new world waits on the other side.........

Posted by ps- kiss your public "service" unions goodbye on January 30, 2012 at 6:30 PM

systemic corruption + inertia = hard to defeat.

personally, i think things will have to get alot worse before we have a legitimate chance to enact the kind of structural changes we need to wrt/ our tax policies & state revenue generation. that said, it is good that more & more people are talking about making changes & proposing alternatives to continuing our failed policies. it is a step in the right direction, albeit the first one in what is likely to be a painful & slow journey.

Posted by philosophy school dropout on January 30, 2012 at 6:31 PM

Infrastructure bank like the Bank of North Dakota

SB 6310 / HB 2434

“While the Washington Investment Trust is modeled after the Bank of North Dakota, this startup legislation is much narrower in approach, since it will focus on infrastructure lending to municipal governments and student loans,” - Rep B.

Gotta start somewhere.

Posted by internet_jen on January 30, 2012 at 6:41 PM

*- Rep B. Hasegawa

Posted by internet_jen on January 30, 2012 at 6:42 PM

"Frequent voter initiative activity adds budget challenges"
This has Tim Eyman written all over it. For the love of god don't vote for his extension of his own terrible tax policy.

Posted by ghrowe on January 30, 2012 at 7:22 PM

HB2100

Asset Tax

Posted by Supreme Ruler Of The Universe

on January 30, 2012 at 7:32 PM

Until people who know better start explaining how voter initiatives make the problem worse, the fuckwit initiative jackass will continue to define the argument.

Posted by lauramae on January 30, 2012 at 7:33 PM

#13

Sure, but in the age of Occupy and demands for more, not less, democracy, how do you rectify that Initiatives are the one and only way for total participation...not just representation.

If anything, the next step is to move to direct e-Voting on these issues...at least some of them, maybe in a non-binding way.

In fact, I'm surprised that we're not doing that.

Really, suppose we were to have a non-binding online system. Every registered voter gets a login. And say an hour before a vote by the legislature, we would get to cast our votes...just by way guidance.

It would be a first step in perfecting e-Democracy.

Posted by Supreme Ruler Of The Universe

on January 30, 2012 at 7:45 PM

@14, just what is a "non-binding" vote?

Posted by sarah70 on January 30, 2012 at 9:24 PM