State lawmakers must take care tinkering with local tax money

Changing the accounting method might be harmless but also might cost local governments money. Local officials need to monitor the change closely.


As the state's legislative leaders continue to grunt and grimace over how to balance the current two-year budget, they are exploring "creative ideas."

That's OK as long as those ideas don't involve picking the pockets of others.

According to The Associated Press, one of the proposals being explored is a permanent change to a state accounting process that would allow lawmakers to balance the current two-year budget by briefly claiming control of local sales taxes that get redistributed to jurisdictions across the state

The state Treasurer's Office sent a memo to county treasurers saying officials were looking to hold local sales and use taxes in the state's general fund for an extra month -- something that would provide a $238 million boost to the state balance sheet. That money is usually sent right into a dedicated account and later distributed back to local governments.

"This proposal -- if adopted by the Legislature -- is yet another way for the state to modernize and improve the way we handle cash," said State Treasurer Jim McIntire in a statement. "A permanent change to this process will help the state better manage its liquidity."

Right now, the state makes daily deposits into the account for local governments. If the state didn't have to put the money in the dedicated account it would be available to spend by the state until it is passed along to local governments in about two months.

Scott Merriman, deputy director of the Washington state Association of Counties, said his organization is fine with the proposal.

We aren't so sure local governments should be so trusting.

The interest on that money belongs to the local governments, not the state. If this change is made a mechanism needs to be put in place to ensure local governments benefit from these local taxes from the second they are collected.

The money belongs to the locals not the state.

Beyond that, this kind of change opens the door for lawmakers to tinker with other rules governing the collection of local taxes.

Sure, current lawmakers could promise they won't make a grab for that cash but that won't stop those elected in the future from taking a "little" off the top.

McIntire, a former legislator, is certainly credible. Nevertheless, his view comes from the state perspective rather than local government.

If this plan is adopted as part of the final budget solution we would hope county and city officials would have plenty of input to ensure local governments get every penny collected on their behalf.


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