The Washington State Budget
I’d like to delve into the proposed Washington State budget, Chris Gregoire’s version of which can be found here.
According to a press release from the Washington State Office of Financial Management (OFM), projected state revenue for the 2007-09 biennium is $27.89 billion. The current revenue projection for the 2009-11 biennium is $27.95 billion. The state forecasts increased revenue for the state in the upcoming budget period, over the current period, and yet, all we’ve been hearing is talk about deficits and shortfalls and the decreasing distance between the earth and the sky.
I have one question: If you make the same income this year as you did last, then how is it possible for you to have a budget shortfall?
Answer: When you want to spend more money than you receive.
In mid-November, the number reported by the Seattle PI for the projected budget deficit for the 2009-11 biennium was $5.1 billion. But if the projected income between this budget cycle and the next is basically the same, then the only way to have a deficit of $5.1 billion is if the state wants to spend more than they’re projected to take in. A lot more.
According to a story on Crosscut.com, the state auditor made specific recommendations that, if implemented, would save the state $4.1 billion in costs over the next 5 years. Assuming that savings is accrued uniformly over those 5 years, then the state could save $1.64 billion in the 2009-11 budget cycle.
The Washington Policy Center blog has a transcript of State Auditor Brian Sonntag’s tesimony before the Senate Ways and Means Committe, which I will quote here:
Certainly, this budget period is extraordinarily difficult. I respect and value the responsibilities you have and the tough decisions you must make.
I recognize that our Office along with every other state agency must share in the pain of those decisions.
But the budget you have proposed goes beyond funding reductions or a one-time sweep of our cash balance. To take more than half of the revenue that voters permanently designated for performance audits and use it to fund other programs undercuts the performance audit authority that citizens directly gave to their independent State Auditor.
That change contained in Section 927 of the budget and the precedent it sets is absolutely unacceptable.
It is unacceptable to me. It is unacceptable to citizens who in such a time as this look to us more than ever to ensure that government is accountable and transparent. They recognize this Office is uniquely positioned to be part of the reform the governance change that everybody talks about and wants.
According to the blog entry, the committee had no questions for Mr. Sonntag. Also, according to Mr. Sonntag’s testimony, the ratio of savings that the auditor’s office recommendations would realize vs the cost to perform the audits is ten to one. That’s an incredible margin. Deep cuts into the auditor’s office seems a bit like cutting the high school football program before the swimming team. (generally the football program is the only athletic program at a school that generates positive net revenue)
Also in the Crosscut.com story linked above, it’s reported that when California performed the same kind of state performance review that Sonntag has been commissioned by the Governor to perform, the recommendations would save $32 billion over 5 years, which I’ll wager is significantly more than the California auditor’s budget. The point is that it doesn’t make sense to reduce the ability of the auditor’s office to make recommendations that would save more than the office’s entire budget.
The state budget isn’t so much a belt-tightening, as Olympia would love for us to think. It’s more a lack of belt-loosening. I get that some costs increase year after year, regardless of income. Providing medical insurance to state employees gets more and more expensive every year, and the state has no control over that. However, there are all kinds of ways to cut costs without hurting things like schools.
To go on a little tangent here, a not insignificant portion of the proposed 2009-11 budget includes capital improvements, and a good deal of those capital improvements are in public schools. While I support the idea that we need modern schools, I wonder if it really makes sense to build and renovate more schools while laying off the teachers that would work in them.
I don’t envy our legislatures on this one, because if I agree with Chris Gregoire on anything, it’s when she wrote the following in the introduction to her budget:
A wise man once told me that I needed to love my budget since I was going to be spending so much time on it. There is no way I can love this budget. We have to give up or shrink too much. There is something for everyone to not like in this budget.
I’m not entirely certain what the right answer is on this one, here are some thoughts:
- Implement the auditor’s recommendations (and don’t slash his budget!)
- Cut subsidies for in-home care in favor of institutionalizing folks, where it’s less expensive to care for them
- Get tougher with welfare benefits which, without proper enforcement, provides an incentive to do nothing
- Offer parents a voucher for a portion of the per pupil cost of public school to help defray the cost of sending their kids to private school, thereby decreasing education costs for the state, which would ultimately result in more money being available to public schools, so that maybe we wouldn’t have to lay off teachers. (At the risk of being seen as pandering to a specific audience, shouldn’t any layoffs be based on merit/performance, rather than seniority?)
All in all, I admit it’s a bad situation, but it’s not nearly as bad as Olympia wants us to believe, and there are real solutions that for one reason or another, the legislature refuses to implement. If government expenditure is to grow, it needs to grow at a sustainable rate, rather than grossly outpacing revenue growth. The State of Washington can’t print money like the Feds can, so we have to budget wisely, and in the good years, we need to plan for the bad. When we emerge from this rough patch, I hope we learn from our mistakes.
^Z
