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Interview with Sen. John Braun: Washington’s tax structure & priorities next session

This is the third installment in a three-part interview with Sen. John Braun, Ranking Member of the Senate Ways & Means Committee. In the first installment, Braun gave his perspective on the 2019-21 budget passed in the session that ended on April 28. In the second, Braun talks about how collective bargaining agreements impacted that budget and what it was like working with Ways & Means Chair Sen. Christine Rolfes.

In this final installment, Braun discusses tax fairness, differences between parties in regard to budget narratives, and his goals for next session.

Sara Gentzler: What about this prevailing argument that the state’s tax code is upside down, that there needs to be changes so low-income families aren’t paying such a high percentage of their incomes in taxes in comparison to wealthy families? I talked to Sen. Billig, who said he sees Republicans talking about tax fairness now, though there may be a different approach to addressing it. Is that something you agree with? And what would that approach look like, if it is?

John Braun: I think everybody wants to have the fairest tax system possible. I don’t think that’s a partisan issue.

Here’s the issue: When people — and this is somewhat of my frustration with the other side — they say they want to reform tax policy, but they never come with a reform that is revenue-neutral. Fundamentally, if you want to say you want to make it more fair, why is it you always need more money to make it more fair? That just tells me you want to use tax reform as a way to get more money to buy more stuff… And, I think, as long as that’s the case, we’re going to be at a standstill. So, that’s one thing.

The other thing is: I think that the other side’s got to be honest. I mean, they make this claim that we’re the most regressive system in the country, and then they point to the study.

I can’t recite that study off the top of my head. But, if you go read that study, here’s what you find out: That study is specifically aimed at states having an income tax. It’s the states that don’t have an income tax that they say are most regressive.

So, a couple things there. One is, what makes us most regressive, when you really analyze our tax code? Mostly, it’s either the sin taxes — our liquor tax is among the highest in the nation, our cigarette tax is, I think, the second-highest in the nation, our gas tax — those are things that truly make our system regressive. And, then, of course, the last one is the sales tax.

But, here’s the thing: that study includes our B&O tax as a sales tax. So, that study that says we are the most regressive state is very much driven by our B&O tax. And you will, of course, notice that two of the nine taxes we raised this year were B&O taxes. We actually made it worse, not better. And it wasn’t us that voted for them… You’ve got to understand, when you make these claims based on a study — How did the study get to that result? Otherwise, it’s just talking points. It isn’t making it better.

I don’t doubt their sincerity, that they want to make it better. I believe that. And they shouldn’t doubt ours. But we’ve got to be honest with each other.

SG: That makes me think of the difference in framing throughout session, as far as surplus versus no surplus. I’ve read what you’ve written on this, like in your most recent issue of Economic Sense — where do you think that disconnect was between parties, and how do you avoid that? Is there just going to be a difference in framing because people have different agendas?

JB: Well, I do Economic Sense pieces, in particular, to point out the facts as I see them. We work hard to make sure we footnote everything. We’re not making stuff up. The idea is that those are not talking points — absolutely, I have a bias. There’s no question about that. But, I’m trying to stick to the facts.

The point I made before, about the study — you can’t have a meeting with someone from the other caucus without the study coming up in some fashion or another. I’ve made that point repeatedly. Not a single person has taken the time to go break out the study and show me where I’m somehow reading it wrong, somehow misunderstanding what they’re saying.

For me, if we’re going to have an honest discussion about this, they’ve got to look at the facts. Right now, it’s unfortunate, but I’m not sure our political environment allows that. There’s not much tolerance for anything that doesn’t line up with the chosen narrative… I think we’re going to have to stop — and I try to do this, I’m sure I’m imperfect — stop picking on each other personally. Stop making this about a personal battle and start not questioning anybody’s motives.

I don’t have any doubt the folks in the other caucus want to do the right thing. But, we’ve got to get to what we can really do — and what effect will that really have? I think, instead, we got a bit of a rush job. I certainly appreciate the motivation to get out on time, but we did some things that folks will regret in the future.

SG: So, does that apply to the surplus versus no surplus difference that persisted throughout? I buried that in the earlier question.

JB: I’m sorry, I’d add there that they kept saying — in particular, I heard Pat Sullivan say — that there’s no surplus, it’s all going towards what we promised for K-12. That was, frankly, just misleading. Because, all the stuff we promised for K-12 was already law. It was, by law, built into maintenance level. That’s why maintenance level grew from $44 billion to $50 billion. That’s an enormous growth, that’s not normal. All that growth was in maintenance level, and it was already paid for.

What they’ll try to say is, ‘No, all that stuff [was] for the CBAs and for SEBB, the extra SEBB money…” That’s not true. And, if you go talk to the nonpartisan staff, they will tell you: The CBAs, the additional SEBB money, was all additional policy adds.

So, that’s the fundamental difference. They will make the claim that all the surplus was used for K-12. That’s, simply, not true. We paid for all the maintenance level and there was $500 million left over, and that number grew enormously, to $54 billion, by the time we did all the things we did during session.

Candidly, people need to push back on that. When they say that, it’s just accepted at face value. And, it’s simply not accurate. I didn’t make that up, you can go ask nonpartisan staff. They’ll tell you the same thing.

SG: Are there any priorities you want to talk about, heading into next session? Any pressing issues people aren’t talking about, but should be?

JB: I think if I had to prioritize next session…We’ll see how the general economy goes, but I think we’re going to have to get our budget back in order, in a place that’s sustainable. We can’t add taxes like this every year and think that we’re going to not do real harm to our economy. So…just as a matter of shoring up where we’re at, I’d like to see that happen.

Within the budget, I’m fairly disappointed in what we did for developmentally disabled. The challenges we are having in RHCs and the challenges we’re having with folks being stuck in the hospital for extended periods of time, without help from the state, is really a crisis, frankly, for these families and these individuals. And we need to address it. It’s not an expensive problem, but we basically looked the other way. I’m very frustrated with that.

And then, I think we need to finish the special education funding. We really got distracted from stuff that could truly help these students and their parents. So, I’ll work on that some more.

More broadly…to end on a positive note… One place where I think the majority did a good job is, we did truly bipartisan work on mental health. We have a good plan. The governor signed it, thankfully. It’s not a ton of funding, but it’s got the right amount of funding. But we’re going to have to stay after that. That’s going to take several years to build out. And, if we want it to build out properly and serve our state properly, we’re going to have to keep pressure on that and finetune it as it rolls along.

Those are the things I hope to focus on.

This interview was edited for clarity and length.

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