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Olympia’s biggest problem
State lawmakers are trembling at the thought of what it will take to close the state’s growing $2.6 billion budget deficit. Each week seems to bring more bad news — from increased welfare and school district enrollment caseloads, to weaker tax revenue-receipts and lawsuits from groups attempting to stop budget cuts.
Despite acknowledgement of the severity of the budget problem from both political parties and the governor, there has been very little leadership displayed by anyone in a position to do so. Gov. Gregoire recently rejected the idea of a special session to deal with the problem, saying budget writers “haven’t gone in-depth” on the budget, and therefore couldn’t make thoughtful decisions.
The Democratic leadership in the legislature has also remained mum about offering any actual solutions, other than alluding to the “need” for tax increases.
Republicans have been fractured and disjointed in their response to the problem. Though Sen. Joe Zarelli (R-18) has been calling for a special session for months, Republicans have not united behind him, nor is their leadership proposing an alternative plan of their own.
The longer legislators wait to address the problem, the deeper the cuts will need to be. We are only five months in to the current two-year budget cycle, which means any dollar that is saved effective January 1 is equivalent to a $1.50 cut in July.
If legislators were to pass an immediate savings bill in early December (as they did last March), they would have 19 months to eliminate the $2.6 billion deficit, or $137 million per month. If they wait until end of March, they would have only 15 months to make cuts, meaning cuts would be 27 percent higher. If they delay cuts until July 1, legislators will have only 12 months to close the gap, bringing the monthly cut to $217 million — 58 percent higher than if a special session were held in December to close the gap.
Unlike the now — legendary $9 billion “shortfall” of 2009, which included “business-as-usual” spending levels and two budget shortfalls added together, the current $2.6 billion problem is a true deficit. Real cuts will have to be made in order to balance the budget. Immediate steps need to be taken to avoid even deeper cuts.
Though the governor refuses to lead, legislators can call themselves into a special session when they meet on Dec. 3 and 4. It only requires two-thirds of them to agree that they have a fiscal calamity on their hands that needs to be addressed right now.
If legislators pass a savings bill in December, it will remove some of the panic and immediate pressure regarding the size of the budget deficit. It also means they can spend the legislative session crafting a thoughtful supplemental budget proposal in advance of the 2011-13 budget. Policy changes will have to be made and priorities established if we are to avoid a fiscal nightmare in 2011.
Perhaps the majority of Democrats (and some Republicans) are holding out for more federal manna to fall from heaven, or for a magical tax package that won’t get them booted out of office in the 2010 elections. But state government cannot be all things to all people, and this problem won’t get better on its own. Legislators need to do what they were hired to do: make tough budgeting choices about the priorities and roles of government.
Legislators need to revisit the Priorities of Government budgeting process. It will help them rank programs in order of importance so they can stop funding lower-priorities. Prioritizing the state budget is really not very different than prioritizing your personal budget. Things like food, shelter, electricity and transportation to your job get funded first, whereas high-speed Internet, cable and eating out are top considerations for elimination.
But rather than attempting to seriously prioritize the budget, most of Olympia’s leaders will likely spend this time looking for ways to make tax and fee increases palatable to voters. In other words, they might not be missing in action, but engaged in covert ops.
The governor, legislature and budget writers have had plenty of time to evaluate their options. They already spent four months fighting about various cuts and tax increases at the beginning of 2009. It is unlikely that any grand new ideas will occur to them in February or March that haven’t occurred to them already. A budget deficit is only impossible to solve if legislators refuse to act.
Will Olympia’s leaders please stand up?
Amber Gunn is director of the Economic Policy Center for the Evergreen Freedom Foundation, a nonprofit, public-policy think tank in Olympia.