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Olympia’s biggest problem (hint: It's not the budget deficit)

Guest opinion: With a state financial crisis developing, this is no time for tax-dependent legislators to sit around hoping for the best.
Amber Gunn

Amber Gunn Evergreen Freedom Foundation

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. Chris 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-Ridgefield, 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 into the current two-year budget cycle, which means any dollar that is saved effective Jan. 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 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 would mean they could 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.


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Comments:

Posted Wed, Nov 25, 7:58 a.m. Inappropriate

I predict this legislative session will be just like every other in this regard: legislators will arrive with arms full of new legislation. Some of it will be pushed by special interests groups for their benefit, some of it will be the product of legislators' desire (and wrongheaded belief that it is their job) to leave a legacy. All of this new legislation results in increased costs to State and local governments. What we need is a citizen's initiative: For every new piece of legislation the Washington State Legislature wants to add to the Revised Code of Washington, two existing pieces of legislation must, first, be removed from RCW.

BlueLight

Posted Wed, Nov 25, 9:46 a.m. Inappropriate

Very good, "BlueLight"; I've been advocating that for decades. Maybe a groundswell is forming!

dbreneman

Posted Wed, Nov 25, 10:45 a.m. Inappropriate

Maybe an attorney reading this could offer their opinion as to whether such an initiative would pass constitutional muster...

BlueLight

Posted Wed, Nov 25, 2:30 p.m. Inappropriate

I've also become frustrated with Governor Gregoire's difficulty in exercising leadership on the budget, though I imagine the kind of leadership I would like to see is very different from what you would want to see.

She only briefly mentioned the prospect of more revenue after the election, and the resounding defeat of I-1033 should have been a clue that the public is more ready for this than the governor gives us credit for.

I tend to be a little skeptical when I read such things as 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, without seeing the details as to what the proposed priorities are (yes, I did follow the link, but there is way too much there for me to read through right now). The devil is in the details, as they say. According to my back-of-the-envelope calculations, we are looking at about a grand total 28% budget cut, barring federal money or increased revenue, from the 30% portion of the budget that is discretionary. That's on top of what we already had.

I do like the POG system, though, and see it as a way to get to a more "holistic" approach that bypasses some of the institutional inertia that often plagues the system.

Posted Wed, Nov 25, 2:46 p.m. Inappropriate

Sorry, Pepper. The foxes have proved they are incapable of guarding the chickens.

BlueLight

Posted Wed, Nov 25, 3:25 p.m. Inappropriate

Back in the early 90s I worked in state government and in fact worked on the state budget. (I haven't worked for the state for a long time and have no plans to do so again, so while I'm opinionated I'm not biased that way.)

Ms. Gunn, you've written approximately the same piece that the Evergreen Freedom Foundation has been writing for decades, and it still seems as unhelpfully oversimplistic as ever. I suggest you research your topic in some depth. Why not spend a few days shadowing some budget staff and learning about the complexity of the problems?

To use your household analogy, the state budget has been stripped of pizza and movies long ago, and is down to choices such as clothing at least some of the kids versus feeding them.

I'm really tired of people indulging in habitual cynicism and contempt for government. Yes, there are many frustrating realities of government (and private-sector bureaucracies as well)--the inefficiencies, the organizational politics and group dynamics. But there are also a surprising number of capable, decent people working very hard in there to keep things from falling apart in our public systems. They deserve more respect than they usually get.

@BlueLight: I think your proposal would cost a lot of money to implement, because "pieces of legislation," whatever that phrase means, are in the code for a reason, and someone would have to evaluate the impact of removing them, and that kind of evaluation takes time and money. Or you could just randomly hack away at the code and wait for the lawsuits to come pouring in as the unintended impacts of the code changes get taken to court. But that costs even more money. Kind of like, if you tried to update your house's wiring by instituting a rule: for every new wire you put in, you have to remove two. No sane electrician would work that way.

Posted Wed, Nov 25, 4 p.m. Inappropriate

Yarrow, take a nap.

Posted Thu, Nov 26, 8:37 a.m. Inappropriate

Nothing original here, just the same old "drown the government in the bathtub" crapola from the Evergreen "Freedom" Foundation and its wingnut welfare funders, this time delivered by a young lady with a pretty smile.

ivan

Posted Thu, Nov 26, 8:47 a.m. Inappropriate

Nothing original in the response here, just the same old "grow the government and protect the union positions" crapola from the Washington State "Democratic" Party and it's wingnut welfare advocates, this time delivered by an old man with no smile.

Cameron

Posted Thu, Nov 26, 12:30 p.m. Inappropriate

Agree with Bluelight.

Yarrow: I am an elected official at a small special use district in King County. I am also a veteran of tough politics in King County from the outside, leading, with others, the fight against the CAO.

I now see from the inside and I agree with you there are many fine public service employees. The problem is, especially with those who never had a private sector job, is they caught in that mindset of process. Process becomes work, even if it doesn't achieve anything.

I attend board meetings where we spend millions in a La La land fashion. Then I get on my logging shovel out in the real world and deal with real issues and problems.

I don't have much sympathy with your 'frustrating reality of government' argument. I will continue to be habitually cynical with useless process that wastes resources, especially in an economy like this.

Ivan: Remember when we busted your pol meeting down there by Fauntleroy? Fun evening, you had Ron Sims there so we tramped on down there just to let him and you know of our high opinion of your CAO. We certaintly kicked your a$$ on that one, didn't we?

Posted Thu, Nov 26, 1:42 p.m. Inappropriate

This is going to be fun Ivan, your boy is dirty, his administration will be a failure and probably bankrupt the county. There is a reason he had to hire nearly dead Fred (in a political sense of the word) to run interference for him. Dow has no ideas and cannot risk alienating his union handlers, so he will let Fred take the fall when reform fails. I count two new tax increases on the way Ivan and the ink isn't even dry yet.

Cameron

Posted Thu, Nov 26, 5:32 p.m. Inappropriate

Cut #1: Eliminate levy equalization, Republicans put their money where their mouths are.

Mr Baker

Posted Fri, Nov 27, 4:59 a.m. Inappropriate

Thank you Ivan Weiss Democrat King County Committeeman, friend and supporter of Dow Constantine. I don't know why Dow would have any problems dealing with rural King County given the attitude displayed by such distingushed party representatives. Have you gotten your patronage job yet Ivan? It will be hard to keep anyone in line when the Department in charge of enforcement is 9 Million in the hole this year. Maybe your boy will close some more Senior Centers and Food Banks to free up money for CAO enforcement, that would be his style.

Cameron

Posted Fri, Nov 27, 6:59 a.m. Inappropriate

Ivan: Lets review.

When 3 appeals court judges and a division (5) Supreme Court judges unanamously throw out the single most significant and far reaching provision (socialist stretch) of the CAO, thats clear victory.

The CAO, and other liberal reaches, like the shoreline master plans,in-stream flow rules, exempt well assaults, fish and forest law, Yukon to Yellowstone corridor and various ESA related initiatives have resulted in the organization that visited you that day growing into a state org with ten county chapters and three affiliated groups.

Guys like you get the credit, 'cause you and yours keep lobbying for laws and rules that threaten basic property rights. You are our best recruiters.

Get a grip Ivan, your blood pressure is up. when we were standing eye ball to eye ball, you weren't that fierce.

Posted Fri, Nov 27, 7:59 a.m. Inappropriate

You know, I had something to add here ... but then read through the preceding commentary and thought ... possibly not worth the keystrokes? The CAO is a prescriptive county land use ordinance. The topic at hand is the overall state budget, a serious financial matter largely made up of expenditures for education, health and corrections. Apples and kumquats.

First: Lots of legislators are doing serious thinking, talking about what to do, how to respond. The institution has its own burden of calendars, rules and processes that make the sort of 'grass roots' procedural action that Amber calls for pretty unlikely.

Secondly: POG alone is completely unsuited to this situation, except insofar as getting rid of the remaining accrued baggage (not much left) shows sincerity of EFFORT. The current situation will require not only continued rigorous budget-scrubbing, and, yes, considerations of some ways to broaden the revenue picture, but getting some attention paid to what has loomed as an essential question for the last 18 months or more: What of the long term? If we don't figure out a way to consider the implications of long-term stagnation of revenue, then we and this state will be in a world of hurt, longer-term.

Neither the far right nor far left will assist in this effort, I fear, because their attention is wholly focused on bashing positions ... and on the election cycle: What district can we win in 2010? Who can we "whup" next year? Who's raised the most money in the last quarter?

How much energy and attention can be left for the longer-term problems, such as dealing with a multiple-biennial budget crunch when our collective attention span is so short and so oppositional?

Deb Eddy

Posted Fri, Nov 27, 9:17 a.m. Inappropriate

You kept the opposition from participating in the budget process last session and voted against most if not all of the amendments aimed at curbing costs. What have you done Representative Eddy to change the game in Olympia for a more positive, inclusive,cooperative, solution based outcome? Nothing.

Cameron

Posted Fri, Nov 27, 10:08 a.m. Inappropriate

Internally to the Democratic caucus (remember, that's how Oly works, Cameron, it isn't some undifferentiated mass), I am working hard to be more inclusive, yes, and to champion a balanced analysis of the short and longer-term problem, including a need for a longer-term strategic analysis. I am not assigned to any of the usual budget committees, so, no, I don't get to participate in the creation of the "messaging" (dueling bullet points) that is the product of the "caucus" system.

For years now, I've championed Pete Peterson's book, RUNNING ON EMPTY, as a great illustration of the ways in which partisan polarity and short terms of office have worked against the public interest. See my point, per emphasis on election cycles, above. Think tanks like EFF on the right or Budget and Policy Center on the left provide counterpoints -- or counter punches -- on public policy. The truth, alas, lies somewhere in between. And it's up to the elected officials to figure out where that middle point lies.

Deb Eddy

Posted Fri, Nov 27, 12:22 p.m. Inappropriate

How many of the amendments made by the Republicans that made it to the floor dealing with cost control or asking for scoring of legislation ( like the Greenhouse Gas bill) did you vote for? You do control your own vote, so people can see how your reaching across the aisle to support fiscally conservative ideas manifested itself.

Cameron

Posted Fri, Nov 27, 2:52 p.m. Inappropriate

That information only matters, Cameron, if you are "scoring" the game according to Democratic and Republican "messages". Your question about the Republican amendments goes right back to that place where it's all about Republicans versus Democrats. The caucus system of state legislative governance ensures that everyone -- including Speaker Chopp and Minority Leader DeBolt -- already know where the votes are, which amendments will move and which won't. So dissecting individual votes after the fact is usually out of context, but good political fodder, huh? A great deal of what we have accomplished in the past few sessions (my tenure) goes to what hasn't made it to the floor, or about adjustments and amendments made in committee. But that's all past. I'm interested now in what we're going to do - future tense.

Deb Eddy

Posted Fri, Nov 27, 8:52 p.m. Inappropriate

I agree, and this applies at the public sector leaders, state legislative/executive, and national levels, i.e. tax-dependent leaders/legislators are sitting around hoping for the best. They don't know how to make these most difficult decisions. It's even manifested itself in schools, at least for me. I had a graduate level class in Public Sector budgeting. For our class exercise, we had a role-play where less revenue came in than was projected, but still more than the previous year. Some of the class portrayed Republicans, some Democrats, and it was relatively easy to come to an agreement under a laboratory-like situation without lobbyists and constituents in our faces. My suggestion to the instructors was that the exercise wasn't tough enough; we should have also had an exercise where we had less revenue come in than the previous year. It would seem that our leaders are all shy of this experience, which is why so many have the "deer in the headlights" response when coordination, negotiation, and compromise are genuinely necessary, not just a campaign promise that's never fulfilled or even seriously thought about.

bricsa

Posted Sat, Nov 28, 8:53 a.m. Inappropriate

So you are saying you voted party line ( But only if you are going back to Democrat and Republican message scorekeeping) and did not make a stand or a statement that would reflect the need for more fiscal responsibility in the face of a know crisis. The record is very clear.

Sorry, but your call for reform after your years in the majority ring hollow. Leadership needs to be replaced and a divided government needs to happen at the state, county and local level. Only then will there be true joint responsiblilty when everyone is included in the process. How are you going to vote on 960? How about allowing counties to tax utilities in unincorporated areas? You know, like King County is going to lobby you to do? What about the TBD, you voted for it, will you allow it to expand the dollar amount allowed? How about in an "emergency" like our current fiscal down turn? Start voting your rehetoric.

Cameron

Posted Sat, Nov 28, 8:55 a.m. Inappropriate

That should read "known" crisis.

Cameron

Posted Sat, Nov 28, 10:35 a.m. Inappropriate

The trouble with Sen. Zarelli and his special session is that his big money saving ideas are deport all the illegals and end bilingual education, things that aren't within the state's power to really address and certainly not in a two-day session.

Ryan

Posted Sat, Nov 28, 12:41 p.m. Inappropriate

Take a look at the State Auditors report on Medicare/Medicaid as implemented by DSHS. All you have to do is search under "undocumented aliens". If the Fed's ever ask for repayment it will bankrupt the state. We haven't been in compliance for over a decade. Findings every audit. But don't ask the current majority party to actually enforce the laws and regulations.

Cameron

Posted Sat, Nov 28, 7:39 p.m. Inappropriate

Yarrow writes: "To use your household analogy, the state budget has been stripped of pizza and movies long ago, and is down to choices such as clothing at least some of the kids versus feeding them."

That statement strains credulity. State government has grown over 30% in the last two legislative sessions. It's preposterous to claim that all of that spending is necessary.

dbreneman

Posted Sat, Nov 28, 7:39 p.m. Inappropriate

Yarrow writes: "To use your household analogy, the state budget has been stripped of pizza and movies long ago, and is down to choices such as clothing at least some of the kids versus feeding them."

That statement strains credulity. State government has grown over 30% in the last two legislative sessions. It's preposterous to claim that all of that spending is necessary.

dbreneman

Posted Sat, Nov 28, 9 p.m. Inappropriate

amber gunn for gov, 2012

rasul

Posted Sun, Nov 29, 3:54 a.m. Inappropriate

"You know, I had something to add here ... but then read through the preceding commentary and thought ... possibly not worth the keystrokes? The CAO is a prescriptive county land use ordinance. The topic at hand is the overall state budget, a serious financial matter largely made up of expenditures for education, health and corrections. Apples and kumquats."

Rep. Eddy, The CAO's are statewide GMA provisions that are the forefront of a wave of land use regulation that threatens to redefine ownership as we understand it. The state seeks to regulate shorelines at a new level, define in-stream flows, exercise control over exempt wells, define in-state corridors (Y2Y), continue taking vast amounts of timber through excessive buffers and regulating land use to the crest of the cascades through the Puget Sound Partnership. I assure you landowners threatened by these actions consider the keystroke's since that may be most of the value of their properties.

your financial problems are easy to see when you don't overanalyse. You spent at a 33% rate at a time when your revenues were 20%. You didn't plan for a downturn even though you were worned by many. Many problems are structural, not easily fixed quickly. Overegulation kills productivity thus affects tax revenue. Government is far too big. You haven't funded pensions....

Income tax won't solve it. spending restraint will. This is Dino's revenge.

Posted Sun, Nov 29, 10:50 a.m. Inappropriate

You have some very good points in here, EKCRNL (if I may shorten the moniker). The trick in large complex societies is figuring out how to BALANCE points of view. I am reminded of the day an elderly neighbor told me she'd never vote for a school levy again, "because I raised mine; we're done in this house." Absolutely accurate from her point of view, but completely oppositional to the shared responsibility accepted by us and required of us in our constitution. Also ... pretty crass.

I'm not defending every action taken in the past, particularly not the way the CAO played out. Talk about tone-deaf, and without any understanding of how specific regulations play out in specific circumstances. I apologize for something I had nothing to do with, but still ... it wasn't pretty, I agree. Still: don't think Amber's piece was about CAO.

You put two phrases together that creates a pretty good picture of the dissonance: "Government is far too big. You haven't funded pensions ...". Part of that governmental big-ness comes from government's generous hand with benefits, a hand that has become tighter over time (ask about the difference between LEOFF and PERS II). Nonetheless, those commitments remain. Caseloads - incarcerations, 'get-tough' laws, higher incidences of disabilities, higher levels of child and adult abuse, aging population, to say nothing of the educational and support needs of school-age children -- drive some of that big-ness, too. Yes, spending restraint is absolutely, completely and totally required ... I came to Olympia with that message and haven't backed off, not starting now. MY fiscal committee, transportation, has stretched dollars for the three years I've been there, covering more projects for less money -- year after year.

But, as to the general fund, there is a problem in leaning too hard on restraight (especially if what we're trying to do is avoid over-analysis): slashing alone just gets you reduced services, more people on the street, fewer investigations into major crimes, depleted emergency funds and balances. To the degree that we get beyond some of the sacred cows that have prevented reform in the past, well, good for us. But it will take more than restraint -- add in analysis, innovation and redesign of some of the processes that have become so hindbind, in law and practice, in recent years. It's an exciting time ... we could succeed, or we could fail. Our choice. You can see it as Dino's revenge, if you like, but that election is 'way over. We've got good people in Olympia -- the question is whether we can get beyond our worst instincts (see earlier posts, applies to Republicans and Democrats alike) and actually deal with the situation.

Deb Eddy

Posted Sun, Nov 29, 1:53 p.m. Inappropriate

The problem is that the monies were provided to Olympia with the idea that those elected to represent the people would address obligations such as employee pensions first, the voters have apparently been wrong in that assumption. Current leadership has betrayed the trust of those who put them in office.

As for transportation the bait and switch of projects and funding sources has resulted in less for more in almost every department, you may look to the ferries/replacement ferries and maintenance for two areas of concern.

Your statements of "We've got good people in Olympia--the question is whether we can get beyond our worst instincts and actually deal with the situation" And "To the degree that we get beyond some of the sacred cows that have prevented reform in the past, well, good for us." Getting beyond our own worst instincts and sacred cows? This is leadership and fiscal responsiblity?

Will you vote to repeal 960 representative and will you support a State Income Tax? Governor Gregoire has stated new taxes will be a part of the effort to balance the budget, how much is enough? A number please.

Cameron

Posted Sun, Nov 29, 4:45 p.m. Inappropriate

Cameron, if you think that you can boil this down to "[a] number please," then you are part of the problem.

Deb Eddy

Posted Mon, Nov 30, 6:53 a.m. Inappropriate

So there is no upper most limit of taxation where you as a Washington State legislator would draw the line? You are absolutely right I am going to be a problem for any elected who thinks that there should be no upward limit to cumulative taxation.

Since you are aware that the question of 960 will come before you as well as a State Income Tax, your unwillingness to address these issues would indicate you will be voting for both.

Cameron

Posted Tue, Dec 1, 10:09 a.m. Inappropriate

Since 2007, the Washington State Legislature has enacted a bunch of new legislation based on the questionable science behind climate change. The Office of Financial Management estimates this legislation will add $136 Million to the cost of state government over the next decade. This does not include trickle-down costs to local governments, businesses and - oh yeah! - individuals. This money COULD have been used for - let's see - schools, roads, ferries, health care, corrections, even a viaduct! But no. This is a competing need that did not exist just two years ago.

BlueLight

Posted Tue, Dec 1, 6:13 p.m. Inappropriate

Having already cut non-required programs to the bone and beyond, the Leg now has to come up with revenues. They tasked JLARC with suggesting tax breaks to eliminate, then did not eliminate any. This list needs to be revisited, starting with the largest yield on the list of suggestions. From here on, we need to put a fiscal note on any proposed tax breaks. They represent money out the door, the same as expenditures. We should also measure their outcomes, the same as the state demands for social programs. How many of the promised 1,200 jobs did Boeing deliver for its 20-year, $3.2 billion tax break in 2003? Oh, yeah...

Posted Tue, Dec 1, 9:28 p.m. Inappropriate

So are the going to start requiring fiscal notes on expenditures and new programs too? No? Gee that doesn't sound prudent.

Cameron

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