Updated Aug. 17, 2010
Today is Washington state’s Primary Election Day. Be sure to vote.
Meantime, there are valid reasons why Washington state public officials’ pleas of poverty and and justifications for tax increases have fallen on the deaf ears of most businesspeople. The overwhelming majority of companies – large, medium and small – have had to resort to cost savings. But only recently in mid-2010 have state leaders finally admitted state government needs to be downsized by as much as 7 percent across-the-board in the wake of declining revenue and continuing forecasts of $3 billion deficits.
However, for years, many of us have warned about the state’s propensity to spend wastefully in the face of multi-billion- dollar unfunded state pensions and $3 billion deficit forecasts. Again this year, the Legislature bypassed voter protections on transparency, and raised taxes by $800 million. In the last decade, there have have numerous Biz Coach columns about court cases and shell games by public officials in violations of state spending limits. But we’ve been ignored by public servants, which infuriates the electorate concerned about economic health and job creation.
Ironically, there have been numerous published reports of fiscal waste, mismanagement and abuse. That means if efficiencies were ever implemented– including the best-practices in fiscal management recommended by the state auditor – there would be enough tax revenue.
For example, the state was overcharged $306,000 for supplies by Office Depot in 2009, according to the state auditor. But the state’s Department of General Administration denies it’s overspending. We have to wonder how badly the other agencies are misbehaving.
The contract with Office Depot is part of a $24-million deal that includes other state agencies, institutions of higher learning and local governments.
The agency is part of a list of other state agencies also in denial, especially the Department of Social and Health Services (DSHS), and the Washington State Department of Transportation (WSDOT) and the ferry system.
As a business-performance consultant who has solved the financial headaches of public and private-sector clients since 1992 – often by not even having to look at numbers – just observing people at work – I have also interviewed State Auditor Brian Sonntag.
As I’ve written before regarding public policy, I’ve witnessed tons of waste at DSHS, WSDOT and the Washington State Department of Personnel.
My sense also is that Mr. Sonntag is a stellar public servant, and I would point a finger at Office Depot for not adhering to the contract rates, as well as at the Department of General Administration for being lazy in due diligence.
This summer, we finally heard about the flawed worked of state employees that caused two freeway projects in Tacoma to be torn down and rebuilt. It resulted in $1.5 million in more waste and no accountability. That wouldn’t fly in the private sector at most companies.
Don’t forget about the KING 5 series on mega millions in waste and inefficiency in the state ferry system.
Also, I’d ignore the disingenuous arguments in the $2 million Initiative 1098 campaign to start a state income tax. An income tax would soak the rich – many of the very people who hire workers and make investments.
A state income tax has not helped two states where I spend a lot of time: Oregon and California.
An income tax here would send a negative message to prospective employers around the globe that might consider establishing a presence in Washington. Why would anyone want to harm our potential to grow the economy and create jobs?
Another thought: Should this income tax pass this year, state officials will find excuses to broaden the income tax to include middle-income taxpayers, too. Have you ever known a tax not to expand or even disappear?
Now comes the disingenuous allegation in two state reports claiming that voters should not privatize liquor sales because they would cause shortages. That’s bunk. Not only will we put a governor on the unfunded pensions of 1500 state liquor employees, the number of privatized liquor outlets will expand 10-fold. That enhances tax revenue — it doesn’t decrease it.
Please forgive me for being a tad gauche, but you’re best advised to consider all the government waste and mismanagement, as well as the candidates’ philosophies before going to the polls or returning your absentee ballot.
Courtesy of Enterprise Washington, here are two research resources:
- Reviewing candidates’ answers to the Enterprise Washington & WashACE Candidate Questionnaire, accessible through the GROW Voter Guides.
- Viewing incumbent candidates’ legislative voting records.
May Washingtonians decide on a business-friendly environment on Aug. 17 and in Nov.
From the Coach’s Corner, this Web site has more than 50 national and Washington state public-policy columns regarding the governments’ adverse impacts on the economy and business climate in this section.
There are better options for economic development
Updated - Oct. 1, 2012
Yes, hotel owners are panic-stricken – hospitality profits are down in Seattle and everywhere else. But once again, Seattle ranks fifth among the 50 most-expensive cities for travelers, according to a highly publicized report. It’s the 2012 study by the GBTA Foundation, the education and research arm of the Global Business Travel Association (GBTA).
“Business travel is a key driver of economic growth, but overly burdensome taxes on business travel can often do more harm than good, especially when those taxes unfairly target visitors,” said Joseph Bates, GBTA Foundation Vice President of research.
“Cities and states must think carefully about the sales that local businesses will lose because of the higher costs that travel taxes impose,” he asserts.
Cities are ranked according to taxes levied on travelers for car-rentals, hotel rooms, and meals in addition to the general sales tax.
Highest-combined single day travel taxes:
- Chicago — $40.31
- New York — $37.98
- Boston — $34.83
- Kansas City — $34.58
- Seattle — $34.43
Lowest combined single day travel taxes:
- Fort Lauderdale, Fla. $22.21
- Fort Myers, Fla. $22.21
- West Palm Beach, Fla. $22.21
- Detroit $22.37
- Portland, Ore. $22.45
Ironically, Seattle ranks among the most-expensive but is only the 15th-largest city in America.
“Tax rates that spike add another dimension for travel managers and local businesses. If spending one night in Chicago is 81 percent more expensive than visiting Ft. Lauderdale, for example, it can have an effect on where businesses decide to meet, hold events, and spend their travel dollars,” continued Bates.
The study provides several different views of travel taxes to help readers make informed choices.
The top 50 markets were ranked two ways:
1) By overall travel tax burden, including general sales tax and discriminatory travel taxes.
2) By discriminatory travel tax burden, excluding general sales taxes to count only taxes that target car rentals, hotel stays and meals. Discriminatory travel taxes are targeted at travelers or travel-related areas and go above the general sales tax.
To see the full report, visit the GBTA Foundation.
Over-taxing business travelers hurt Washington state’s tourism and business competitiveness. Job creation and economic health will not be enhanced.
Better ideas: Keep the taxes at reasonable rates to stimulate more business conventioneers and tourism. The higher revenue will keep businesses thriving and the extra tax revenue will reach government coffers.
How? Partner with the travel sector, for example, with Alaska Airlines to generate revenue with special travel programs. And a strong PR program will help. I’m sure skilled pro bono PR help is available in Seattle.
From the Coach’s Corner, for ideas to promote business and economic development in the Great Northwest, see this Biz Coach category: NW ECONOMIC DEVELOPMENT.
“The economy is bad. It’s so bad, third graders in China are being forced to take second jobs.”
Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.