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1990s state tax cuts have limited Washington State's ability to fund public priorities

The strong economy and resulting revenue growth of the middle and late 1990s led 44 states to cut taxes. While many states made moderate changes to their tax structure, Washington State was one of the 16 states that made the deepest cuts. In Washington, as in the other states that passed large tax cuts, we limited our ability to fund important public priorities including education, transportation, health care, and preparation for another economic slowdown. We faced cuts in important programs and downgrading of our bond rating during the labor market slump and continue to face a structural deficit.

A new analysis by the Center on Budget and Policy Priorities in Washington, D.C. compares the fiscal and economic performance of the states that made deep tax cuts with those that were more moderate in making revenue decisions.

This new study supports previous analysis of the state's structural deficit by the Washington State Budget and Policy Center, which showed that the revenue lost by tax cuts made between 1994 and 2001 will total over $2 billion by the 2009-11 biennium.

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