With the first meeting today of Gov. Inslee’s legislative McCleary workgroup, we’re likely to see another round of calls for new taxes – specifically, an income tax and/or a capital gains tax – to fund the rest of the state’s K-12 obligations.

Arguments in favor of new forms of taxation include: Washington’s tax system is unfair and regressive, state government isn’t collecting the amount of revenues necessary to provide the services the people expect, and we’re not extracting enough money from upper-income earners.

Looking at our neighbor to the south, Oregon, where there is an income tax and a capital gains tax but no sales tax, you’ll find just as much restlessness about the tax system. Several high-profile lawmakers there fret about the volatility of the income tax and long for the relative stability the sales tax offers. (Oregon’s tax debate is complicated by its “2 percent kicker” law, “which requires the state to refund excess revenue to taxpayers when actual General Fund revenues exceed the forecast amount by more than 2 percent.“) Former Oregon Gov. John Kitzhaber and current state Senate Finance and Revenue Committee chairman Sen. Mark Hass (D-Beaverton), have proposed a new sales tax for Oregon as a way to stabilize their state’s revenue stream. Sen. Hass said:

“We have to discontinue this boom-and-bust cycle. We have to fix a (tax) system that brings in too much in the good times, and not enough in bad times. We have a tax code that cannot absorb economic downturns.”

In Nevada, meanwhile, where there is a sales tax but no income tax or capital gains tax, Republican Gov. Brian Sandoval earlier this year spearheaded a bipartisan $1.1 billion tax package that includes a new gross receipts tax, similar to Washington’s much-maligned Business and Occupation (B&O) tax. One of the stated goals of the package is to provide a reliable source of funding for education. Gov. Sandoval believes that with the package’s passage,

“there will be an opportunity for once to have a session where you’re not having this knock-down, drag-out fight on the budget and be able to focus on other issues.”

Clearly, the search for a silver-bullet solution to budget problems extends to many other states beyond our own.

As Washington lawmakers work toward the final phase of McCleary compliance and its 2018 deadline, there’s sure to be a lively debate between proponents of a property tax “levy swap,” which is revenue neutral statewide and would pay for a significant portion of the remaining McCleary obligations, and those who favor a more sweeping approach in the form of a new capital gains tax, and/or possibly a new income tax.

We’ll have much more to say on these topics as events progress. Stay tuned.