October 15, 2010

Chris Mobley writes from Washington state on the impact of the crisis on students and workers--and on a ballot initiative that could set a new direction.

AT THE next Husky game, University of Washington fans may be singing a different tune than the revered school fight song "Bow Down to Washington." If state budget cuts continue, Husky fans could be singing "Bow Down to Washington's Unaffordable Tuition."

Tuition at the University of Washington (UW) increased by over 28 percent over the last two years, on top of tuition increases every year in the last decade.

Even for the lowest-income students who get help from the Husky Promise program, the promise may be broken. Recent comments from interim UW President Phyllis Wise indicate that the Husky Promise program may be facing a severe budget crisis itself, just as the need for this program has never been higher.

UW staff have not been spared either. Night custodians, for example, report that they are now doing the work of two to three people, cleaning an average of 42,000 square feet per person, compared with 25,000 square feet for the daytime custodians.

These cuts and tuition increases are especially painful now because of the increasing numbers of recently unemployed, older workers seeking to increase their employability by going back to school.

SEIU members deliver signatures in support of I-1098 to the Washington Secretary of State's office (SEIU Healthcare 775NW)

Stories like these have become as common as hearing some dingbat crazy thing out of the mouth of Glenn Beck. In today's America, budget cuts are becoming the "new normal," and things don't appear to be getting any rosier.

Washington Gov. Christine Gregoire, a Democrat, recently announced an across-the-board 6.3 percent cut to all state departments in response to the latest state revenue forecast that predicts, you guessed it, a $1.4 billion shortfall in the next biennial budget. This is on top of the pound of flesh taken from critical services after the legislature dealt with the $12 billion shortfall in the last budget.

In Washington's largest county, the budget proposal of King County Executive Dow Constantine, who drew support from organized labor to win election, calls for eliminating 500 county positions, 12 percent cuts to all tax-supported county agencies and slashing all money slated for human service programs, including aid for survivors of domestic violence and sexual assault--in order to make up for a nearly $60 million shortfall.

And if that doesn't want to make you cry, Seattle Mayor Mike McGinn proposes 294 layoffs of city staff, closing one community center and the partial closing of six others, and an 8.5 percent cut to city libraries that would result in a weeklong shutdown at the end of next summer, among other things.

This whole crisis is like watching a bad horror film--one that also has a sequel: "From the people who brought you "Slash and Burn: The 2010 Budget Crisis" comes the long-awaited sequel "Slash and Burn 2: Make You Pay, Coming to a Public Service Near You."

KNOWING THAT budgetary problems like these can't be solved by cuts alone, state political leaders have put their heads together to come up with tax increases--but only ones that affect poor and working people disproportionately.

Last year, the state proposed taxes on candy, bottled water, soda, beer and cigarettes, which are expected to raise $257 million in tax revenues. King County's Dow Constantine is asking voters to approve a 0.2 percent county sales tax levy.

Mike McGinn also proposes some nickel and diming of his own for the Seattle budget. City parking rates will increase, Sunday parking will no longer be free, cat licenses would go up, library fines will increase, children under 13 would be subject to collections of unpaid library fines, and municipal court fees will increase substantially.

The problem with these tax and fee increases--which, by the way, won't raise nearly enough revenue to prevent cuts--is that they impose an unfair burden on the people most directly affected by service cuts in the first place.

With no income tax, Washington state relies totally on regressive sales and property taxes to meets its budget needs. No wonder a recent study by the Sightline Institute ranks Washington dead last in tax fairness. According to the study, the bottom 20 percent of income earners pay 17.3 percent of their income in taxes of various kinds, whereas the top 1 percent of income earners pay just 2.6 percent in taxes.

Political leaders have said that the worst economic crisis since the Great Depression of the 1930s will require some belt tightening. But whose belts are being tightened? Certainly the poorest, who are seeing increases in consumption taxes, while wages decline, layoffs haunt every workplace and critical social services are cut or made unaffordable.

Yet the richest Washingtonians haven't been asked to sacrifice in any real way. Take just a cursory look at their lifestyle, and you wouldn't even notice we were in a recession.

Take, for instance, Washingtonian Jeff Bezos, the founder, president, CEO and board chairman of Amazon.com, the nation's largest online retailer. According to Forbes magazine's latest list of the richest 400 Americans, Bezos ranks 18th, with a net worth of $12.6 billion. This is increase of nearly $4 billion over last year, when he was worth $8.8 billion and ranked 28th on the list.

Mr. Bezos sure has it tough. While most Washingtonians have had to sacrifice just to pay the bills, he has continued to invest his fortunes into turning the final frontier into the next tourist trap. Blue Origin, the space tourism company he founded in 2000, has plans to launch manned spaceflights by 2012. The company has yet to release ticket prices yet, but if a similar venture, Virgin Galactic, is any indication, they'll start somewhere in the neighborhood of $200,000. Better start saving.

In addition, Bezos is the proud owner of a new Beverly Hill mansion, considered posh even by 90210 standards. According to The Real Estate Bloggers Web site:

The Spanish-style estate is on more than two acres, and has seven bedrooms and seven bathrooms in nearly 12,000 square feet. The grounds have rolling lawns, a formal garden, a long, gated drive, a pool and a sunken tennis court. There is a separate guesthouse, a six-car garage and a motor court. The house also has soaring, beamed ceilings and tile detailing, a media room, a gym, an office, a veranda, a patio for outdoor entertaining and city views.

Comparatively, how have the fortunes of an undergraduate student at the UW fared? For starters, if you're lucky enough to qualify for in-state tuition, it now costs $8,701 a year to go to class at UW when you add together tuition and fees. Plus, according to the university, for your traditional, in-state undergrad, it costs on average $1,035 for books, $9,399 for room and board, $2,265 for personal expenses and $642 for transportation--for a total of $22,042 per year. This doesn't even take into account unforeseen expenses, such as health care

Maybe you're thinking that a student could get a job at a coffee shop or flipping burgers to make their way through school. Think again. According to the Bureau of Labor Statistics' latest numbers, youth aged 16 to 24 face a seasonally adjusted unemployment rate of 18.1 percent. This doesn't take into account so-called discouraged workers--those who have simply given up on looking for a job.

Even if you were lucky enough to get one of these low-paying service jobs, making ends meet would be a Herculean task. The average annual salary for someone working as a food service worker in the Seattle area is $21,760, working full time--and as many people can attest, working and going to school full time is a recipe for disaster.

For many, the only way to make it through school is to take on ever-increasing levels of debt-student loans and credit card debt. A 2008 survey by Demos, called "The Plastic Safety Net," found that young people under 35 had an average of $9,111 in credit card debt. More than half used their credit cards to pay for basic living expenses.

The 2008-09 academic year showed a 25 percent increase in student loan disbursements, according to the U.S. Education Department, pushing the total to $75 billion.

None of these things are new for most people who attended a university in the last decade, but they are all exacerbated by the sour job and income prospects for today's college grads. The promise that a college degree could guarantee at least a decent living is rapidly giving way to diminishing prospects. The waiter at your favorite restaurant may have a bachelor's degree in English, and the barista at Starbucks can quote you Descartes.

BUT RESIDENTS of Washington state have an opportunity to take a step toward turning this situation around. Voters will get the chance on November 2 to vote yes on Initiative 1098, which would raise $2 billion annually to fund education and health care by taxing the rich.

What a novel concept: Tax the same people who are making out fabulously well, while millions face an economic picture as exciting as watching Bristol Palin on "Dancing with the Stars."

Far from turning the state into the People's Republic of Washington, as its critics charge, I-1098 would impose a modest 5 percent income tax rate on individual incomes over $200,000 per year and a 9 percent rate on incomes over $500,000 per year. The measure would also reduce the state portion of the regressive property tax rate by 20 percent and cut taxes on small businesses.

If passed, Washington would join other such socialist republics as Utah, Idaho and Wisconsin, to name a few of the 43 states that tax income.

But even this very modest measure has earned the wrath of the state's filthy rich. Our favorite billionaire Jeff Bezos has joined up with his buddy, Steve Ballmer, CEO of Microsoft, in donating $100,000 to the No on 1098 campaign. Joining them is area drugstore kingpin George Bartell, whose company Bartell Drugs is donating $50,000.

Uniting this motley crew is the Washington Roundtable, a Who's Who of moneyed corporate interests in the state--Microsoft, Boeing and the northwest representatives of JPMorgan Chase and Wells Fargo, to name a few. Yes, the same bankers who received billions in taxpayer money now oppose even a small tax on that wealth.

I-1098 asks two very different sets of people to make a choice. For students and working people, we can save public education, start to fix the regressive tax structure in the state, and defiantly say that we are sick and tired of paying for the economic crisis that we didn't cause. For state political leaders, they have an opportunity to avoid what a recent International Monetary Fund report concluded could come about if they continue on the same path of painful austerity: America and Europe risk "an explosion of social unrest" unless they tread carefully.

By social unrest, they mean the example set by students in Puerto Rico last spring. Responding to painful cuts to higher education, tens of thousands of university students, with support and aid from their parents and community members, occupied and shut down all 11 campuses of the University of Puerto Rico system. Through the course of the two-month struggle, students were able to win their central demands and force Puerto Rico Gov. Luis Fortuño on the defensive.

If Washington's political leaders want to avoid this sort of "social unrest," they should support social justice in the Evergreen state. Otherwise, they may be hearing another song at UW: "Bow Down to Washington's Student and Worker Power."