$14 million for face lifts and nose jobs — or child care for 39,000 working families?

January 31, 2011 | Alex Stone

Until a few days ago, Working Connections Child Care – one of the state’s most efficient welfare-to-work programs, according some – was slated to fall under the budget axe. Now lawmakers are now looking for $12 million in savings to maintain the program. Here’s where they can find it: by ending a $14 million state tax break on cosmetic surgery.

Working Connections works by offsetting some of the cost of child care for people earning low wages, making it possible for people to afford to go to work. By providing a pathway out of poverty and into the workforce, it has literally saved Washington tens of millions of dollars in reduced TANF outlays, restored the dignity of work to thousands of people.

But the steep decline in state revenues brought on by the recession threatened the success of Working Connections. Currently, families at 175% of the federal poverty level – up to $2,671/month for a family of three – are eligible for a child care credit. Proposed budget cuts would push that qualification level down to 82% of federal poverty, or just over $1,200/month for a family of three. That’s far below what one adult working at minimum wage earns, so it would all but eliminate the program.

As Jerry Large noted in his recent column, state lawmakers are seeking $12 million in other savings to save the program. That could mean any number of things – but in the current climate, it most likely means taking the money from some other crucial public service. A better alternative is to examine some of the 500+ special tax preferences and exemptions that have crept into law over the past 70 years.

Ending the tax break on cosmetic surgery would restore enough state revenue to keep Working Connections working well for Washington’s parents, children and employers alike — and even expand the program a bit, to make it easier for people to get a job and keep it during the recession.

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Posted in Early Learning, Educational Opportunity

Comments

  1. Winslow P. Kelpfroth says:

    So you’re saying that an increase in the price of a vanity service of between 6.5 and 9.5% is not going to have any effect on the demand for the service? That’s a bit of a stretch, particularly when one can fly to Houston and have the optional/medically unnecessary procedure done at some discount to what it will cost in Seattle.
    I agree that the retail and B&O tax need to be broadened with fewer if any exemptions, including groceries, but don’t kid yourselves that there will be an immediate bump in revenues to the extent of these projections.

    • If you’ve got a beef with the $14 million figure, you’ll have to take it up with the economists at the Washington State Department of Revenue, as they developed that estimate. And since developing reliable budget estimates is what they do for a living, I would think they’ve taken elasticity of demand into account. But you can always ask them yourself if you’d like.

      According to an analysis by the Washington Budget and Policy Center, Washington’s sales tax rate could be much lower – without reducing revenues needed to support our vital public systems – were it not for special tax preferences.

      For example, the current 6.5 percent sales tax rate could be lowered to 5.3 percent simply by eliminating the sales tax exemption on personal and professional services. By further eliminating tax subsidies for businesses, the general sales tax rate could be lowered to 4.2 percent – fully 2.3 percentage points lower than the current rate.

2 Pings/Trackbacks for "$14 million for face lifts and nose jobs — or child care for 39,000 working families?"
  1. […] This post was mentioned on Twitter by Sue Lani Madsen and Scott Davis, eoionline.org. eoionline.org said: $14 million break for face lifts and nose jobs – or child care for 39,000 working families? http://wp.me/p9LcH-27w @FuseWA #waleg #p2 […]

  2. […] my colleague Alex wrote about how the state’s Working Connections program helps working parents by making child care affordable. He’s right – but that’s only part of the story. High-quality child care is also […]

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