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Source: ERFC June 2009 updated forecast, actual through May 2009

WA employment lagged the nation in the downturn, but will recover at about the same rate as the nation. Source: ERFC June 2009 updated forecast, actual through May 2009. The recovery in WA personal income growth is expected to match the nation’s.

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Source: ERFC June 2009 updated forecast, actual through May 2009

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  1. WA employment lagged the nation in the downturn, but will recover at about the same rate as the nation Source: ERFC June 2009 updated forecast, actual through May 2009

  2. The recovery in WA personal income growth is expected to match the nation’s Source: ERFC June 2009 preliminary forecast; actual data through 2008Q4

  3. Revenue growth* relative to income is at an unprecedented low * Adjusted for new legislation and special factors State revenue grows 0.5% less than aggregate income Source: ERFC forecast; actual data through 2009Q1

  4. Additional Financial Realities • U.S. spends 6% more of our personal income on health care costs -- $2,400 additional per year for a family of four. • Average U.S. family spends $2,600 dining out per year . . . . . • . . . . . did I mention the obesity rate in the U.S. is now approaching 30%! • Tuition has been growing at 3X the rate of inflation over the last decade. • Average Credit Card debt for households with debt: $17,000 (A majority of households [54%] have no credit card debt however): • Average undergraduate student carrying $3,100 in credit card debt and over $20,000 in student loan debt. • State tax spending per capita at 25 year low ($2,250 per capita) • Washington State and local taxes as % of aggregate income = 9.3% (National Average is 9.8%)

  5. We are down but not out! • How to turn this around: • Regain the middle class through policy changes • State needs to restructure its tax code (a shift from consumption to income/profit) • Feds need to curb world trade agreements, incent domestic production (tax incentives for US manufacturers, and be willing to tax imports). • We need a national energy policy with two goals – lower oil dependence, cleaner emissions • State and Feds will need stimulus part II focused on infrastructure build out. • 2) Educate more people to higher levels (close tax preferences in place of education spending)

  6. What Doesn’t Work: • The intelligent arguments I have made for the last 30 minutes will not work alone. • What Does Work: • Politics! Political ideology pains many in education but you need to get over it! • Supply-side theory still reigns until educators (including the media) take risks to tell the truth: • - No jobs, no middle class. No middle-class, no tax base. No tax base, no discretionary state spending. No discretionary state spending, no higher education investments. No higher education investments, no access to low-income, first generation, students of color. Result. . . . High tuition, diminishing aid, only traditional populations being served.

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