Washington Needs Soul-Searching in Public Policy, Budgeting – and Action
Sept. 16, 2010
So now we have further confirmation that Washington state is long overdue in launching a prudent approach to public policy and budgeting. Officially, the state forecasts another $1.4 billion shortfall until June, 2013. That means red ink totaling at least $4.5 billion.
“The governor has already responded to this forecast by authorizing across-the-board cuts, but that simply isn’t the most thoughtful approach available,” said state Sen. Joseph Zarelli, R-Ridgefield, in a press release.
“On one hand she says she wants the next state budget to reflect the priorities of government and Washington values; on the other hand she has ordered cuts to the current budget that allow little if any consideration for priorities and values,” he added.
Sen. Zarelli also raised the salient question:
“What sense does it make to cut services for our most vulnerable citizens by the same percentage as the state’s efforts to promote tourism?”
His suggested alternative to across-the-board cuts?
“It would be better for the Legislature to convene for a short special session, because we can do things the governor can’t. We can make policy and structural changes that would focus the available revenue on the most essential services, and leave enough in reserve to get the state through June, when the biennium ends. We can also adopt reforms that would help when it’s time to write the 2009-11 budget,” wrote Sen. Zarelli.
To more than 50,000 state workers, he e-mailed this request:
“We hope you will take the time, either at work or at home, to submit your savings ideas here. Your ideas will be routed directly to us.”
How does the Office of Financial Management explain the budget shortfall?
“Revenue for the current budget period, 2009-11, is projected to decrease $770 million, resulting in total projected General Fund revenue for the biennium of $28.5 billion. Revenue for the next budget period, 2011-13, is projected to decrease $669 million, resulting in total projected General Fund revenue for that biennium of $33.4 billion.
‘With this drop in revenue, our current budget is now projected to be in the red,’ said Marty Brown, director of OFM. ‘We will enact cuts to address this problem while we look for ways to transform the budget and address shortfalls for the next budget period.’
The forecast projects an ending fund deficit for 2009-11 of $516 million, which includes $4 million in the rainy-day fund.”
Ouch, but it’s not surprising news. As a business-performance consultant, the state’s dubious policymaking and budgeting have been frequent topics here.
What is shocking has been the state’s lack of transparency in budgeting and that many elected officials — excluding State Auditor Brian Sonntag – have been late to the solution process and have not solved these predicted and lingering problems. That’s inadvisable public policy and budgeting.
“Despite still projecting revenue growth of nearly $5 billion between 2009-11 and 2011-13, a budget shortfall exceeding $4.5 billion is projected for the next budget due to a structural spending imbalance and the carry forward costs of programs in the current budget,” said Jason Mercier, the director of the Center for Government Reform at the Washington Policy Center.
“This budget crisis makes it imperative for legislative leaders to bring lawmakers back to Olympia to solve this problem in a thoughtful way,” said Mr. Mercier. “Failing to do their job until the 2011 session convenes in January would be the ultimate abdication of their legislative responsibility to balance the budget.
“If lawmakers continue to refuse to balance the budget they should at least call a short special session to change state law to allow the Governor to make discretionary and rational cuts while leaving up to a one percent reserve,” Mr. Mercier concluded.
Well said, as usual. Actually, Mr. Mercier and Sen. Zarelli have long expressed their public policy and budgetary concerns.
Since 2001, The Biz Coach column, at three Seattle media Web sites, has warned that Washington state’s economy has been too valuable and/or too-fragile to gamble with costly unknowns.
This Web site was launched July 29, 2009. You’ll find countless archived Biz Coach public policy columns with warnings and solutions including, the initial column, Analysis: Steps for Economic Success in Washington State. Not to be gauche, the column’s ideas are valid today. It’s past time to reboot – before it’s too late.
From the Coach’s Corner, for more background information and sound ideas, here are four resource links:
- The state’s revenue forecast
- State Auditor Brian Sonntag’s performance audit work plan
- www.washingtonpolicy.org
- www.washingtonpolicy.org/blog
Washington State Senators Claim Income Tax Is ‘Fiscal Reform’
Updated Jan. 5, 2009
Not to be facetious, but a pre-filed Washington State Senate bill calling for “fiscal reform” reads like an April Fool’s joke. It’s such a preposterous idea, it’s got to be a joke, right?
In reality, it’s not a joke. To solve a multi-billion dollar deficit, two state senate leaders want voters to approve changing the state’s Constitution to pave the way for a new income tax.
That’s right. No joke here. Their idea of fiscal reform is not cutting waste to balance the state’s red-inked budget. And there is waste (click for more on the subject).
Their idea is to keep taxing and spending in the face of plummeting tax revenue, and skyrocketing payouts for the unemployed with 12.8 percent of state residents reportedly surviving on food stamps (“Food-stamp use takes record jump in Washington”).
Then, there’s this headline: “Big year for bankruptcies: up 32% in US, up 45% in Washington state.”
And it’s not a joke that the sponsoring public servants are leaders. Senator Rosa Franklin (D-29) is Senate President Pro Tempore. Joe McDermott (D-34) is the Majority Assistant Floor Leader.
Instead of doing what every Washington family and business are doing to survive within the constraints of existing dollars – the state senators want to amend the state’s Constitution to hit state residents with a new income tax.
Fiscal reform?
Here’s how SB 6250 starts in the first paragraph: “AN ACT Relating to fiscal reform…”
SJR 8219 is their resolution calling for more waste – a statewide election. It’s a controversial proposal that’s been historically rejected by voters.
You can click on the preceding links to see the bills’ wording for yourself.
“No session would be complete without the obligatory income tax proposal,” writes Jason Mercier in an email. Mr. Mercier is the director at the Center for Government Reform, which is part of Washington Policy Center (www.washingtonpolicy.org).
“It will be interesting to hear how this income tax proposal will be able to fulfill this intent and succeed where other income taxes have failed,” he added. “I’m sure other income tax states such as California will be eager to learn how to make income tax revenue recession proof.”
If you like the Senators’ joke, here is a dubious economic indicator to ponder: Allied Van Lines says last year it moved more people out of Washington than the number of people who relocated to Washington. The Puget Sound Business Journal quoted a release from the moving company, which states it made 1,913 moves out-of-state and only 1,907 moves inbound.
It is impossible to tax our way to success out of the Great Recession. And transferring any remaining wealth to the state does not create more wealth for taxpayers. Nor does it create jobs for the unemployed. If the state senators truly want a long-term balanced budget, it’s recommended that the state senators start reading here – “Analysis: Steps for Economic Success in Washington State.”
Otherwise, they will fail as leaders by chasing ill health. Surely, they don’t to make a bigger joke of the state’s budget situation. Or do they?
From the Coach’s Corner, to express your opposition to the proposed tinkering with the state’s Constitution to pave the way for an income tax, tell your three state legislators.
The 60-day 2010 legislative session starts Jan. 11.
