TAXES and SPENDING

During my tenure as Kirkland’s mayor, the city council broke the historic pattern of taking the entire property tax increase and developed fiscally prudent budgets. We took no property tax increase in 1997 and 1998, while increasing services. Perhaps more surprisingly, the 1998 budget was 1.4% less than the 1997 budget.

We asked tough questions, re-arranged a few things, and delivered more value, more services with the money available. That’s what I’ll try to do in Olympia, too.

All governments ‘tax-and-spend.’ If they don’t, roads don’t get built, trash doesn’t get picked up and criminals don’t get picked up. The issue is on what basis they do so.

I am a fiscal conservative, which some people prefer to call ‘fiscally responsible’, or ‘business-friendly.’ Here’s what that means to me:

• When increases in spending are proposed, my first thoughts are, "So how are the existing funds being spent? Is there a way to avoid this increase by re-allocating existing funds?"
• Every tax dollar spent must return real value to the public. And performance measures have to actually measure the public value in concrete, not in imaginary, ways.
• When case loads and incidents consistently increase costs in any sector, we have to move quickly to analyze the cause and find ways of avoiding or mitigating future increases.
• We must look at the ‘big picture’, not only in terms of current needs but also in terms of our state’s long term economic health and the burdens on future generations.

That last bullet point is important, because it’s why I believe ‘conservative’ is an appropriate moniker for my political philosophy. Edmund Burke bases conservatism on the economic philosophy of prudence in government spending and debt. In 'Reflections on the Revolution in France', he articulated its principles, which one could paraphrase as:

Government does not have the right to run up large debts and put this burden on the future taxpayer.

This is an incredibly important principle, and failure to heed it has led to our crisis in health care and pension funding.

Government uses taxes to provide services that we cannot provide efficiently for ourselves individually, like water, sewer, courts, jails and schools. But the underlying economy has to be strong to provide the excess revenue available for taxation. Otherwise, there’s no ‘tax base.’ Thus, a state’s economic health and a successful government go hand in hand. So we need to be sensitive to the impacts of government regulation on the business environment. However, that does not mean that anything that impinges on business is bad, and socially responsible business people understand the need for balance.

Rational regulation, and enforcement, protects us and protects future businesses. Rational taxation ensures that the businesses of today and tomorrow continue to enjoy an advantageous environment. Yes, it limits capitalism, but it’s supposed to do that, for all of our sakes’.

The trick is to find an appropriate balance between the share of our money that we can spend better alone, and the share of our money that is best spent collectively.

Two recent books that I think should be required reading by every legislator are:

RUNNING ON EMPTY:  How the Democratic and Republican parties are Bankrupting Our Future and What Americans Can Do About It, Peter G. Peterson, Farrar, Straus and Giroux, New York, 2004.

The Coming Generational Storm: What You Need to Know about America’s Economic Future, Laurence J. Kotlikoff and Scott Burns, The MIT Press, Cambridge, 2005.

If you have questions or comments about these issues or others, please don’t hesitate to contact me via email at deb@debeddy.net or phone 425.827.9105.