In the latest in the Washington Research Council’s valuable series of reports on how Washington policymakers handled past recessions, Emily Makings looks at revenue changes during the great recession. We encourage you to read the short post for details.
In 2010, Gov. Gregoire proposed increasing taxes by $759.1 million in 2009–11. The House and Senate each passed separate tax packages in March of that year. The House-passed version would have increased revenues by $681.0 million and the Senate-passed version would have increased revenues by $890.4 million. Gov. Gregoire called a special session that year in order for the Legislature to finalize the budget. As we noted at the time, the Legislature needed the full 30 days of the special session because the House and Senate could not agree on the tax package until the last minute.
Ultimately, the tax package adopted in 2010 (2ESSB 6143 and ESHB 2493) increased state revenues by $769.1 million in 2009–11 and $1.65 billion in 2011–13.
She outlines the major provisions of the package. Some provisions expired as scheduled. Some were repealed by voters. Others stuck. Previews of what to expect?
Makings also reports the nation’s governors are asking Congress to provide additional direct financial aid. In addition to removing some of the restrictions tied to the $2 trillion pandemic relief package already adopted,
The NGA also wants an additional $500 billion for “all states and territories to meet the states’ budgetary shortfalls that have resulted from this unprecedented public health crisis. This critical stabilization funding for states must be separate from much-needed fiscal stabilization for local governments.”
Former National Governors Association executive director Raymond Scheppach writes in Governing of the effects the coming recession will have on state budgets. It’s a useful analysis. He briefly discusses five impacts:
1. Rainy day funds will quickly evaporate
2. Revenues will collapse
3. Medicaid spending will explode
4. Governors will cut spending and increase taxes
5. Federal action will be required
Safe bets, all.