When Attorney General Rob McKenna announced his candidacy for governor, he indicated that state government has become too large in some areas, citing the growth of the state budget over the past 40 years. In an interview with TVW’s Austin Jenkins, McKenna said:
“…if you look at state budgets going back to 1970, and if you adjust both for inflation and population growth, what you’ll see is that spending on state government has more than doubled.”
McKenna states a fact: state government spending has grown in real terms in the last four decades, but not "more than doubled."
Now that the state is apparently facing another round of budget cuts this fall, owing to the national economic problems, it is important to have a basic view of how much, and in what ways, our state budget has grown. A short primer follows.
Let's start with McKenna's assessment. In the 1971-73 biennium the state’s General Fund operating budget was $2.36 billion. The 2011-13 operating budget signed by Gov. Chris Gregoire this year is $32.2 billion. If the 1971 budget amount is Washinadjusted for population growth and inflation (CPI), the current budget would be $26 billion.
Another comparison is the “total expenditures” budget which includes capital improvements — state facilities and transportation systems — and non-tax payments such as tuition. In 1971-73 the total budgeted expenditure was $4.42 billion. In 2011-13 it was $76.2 billion. Again, adjusting the earlier amount for population and inflation would put the current budget at $48.6 billion.
While not doubling, real budget growth in both cases has been substantial. How come?
Other factors beyond the general growth drivers of population and inflation, such as demographic and societal changes, have obviously pushed up state spending. The Office of Financial Management tracks some of these. For example, adult prison population has grown considerably faster than population.
Better policy choices can help control demographic drivers. OFM projects that the population over age 85, which is growing rapidly, could increase the need for state-supported nursing beds. But in-home and community-based programs offer less expensive alternatives.
Another obvious driver is federal program support over a broad range of national priorities. In 1970, when federal revenue sharing kicked in, federal, state, and local governments had already established “partnership programs” based on federal assistance. Revenue sharing continued until the Reagan administration shifted to bloc grants.
Federal assistance increased in subsequent administrations. Federal grants to our state rose from a low of 16 percent of state general fund revenue in 1984 to 39 percent in 2009, when the state received $8.3 billion from the other Washington. Federal funds are projected to be 47 percent of the 2011-13 operating budget, and 25 percent of all budgeted expenditures.
Yet another factor is the belief that state government has a role to play in improving the quality of life for its citizens. That sensibility is reflected in the biennial budgets since 1970, even when major cuts were made.
All these factors mean that budgets have grown through both periods of economic distress and prosperity. Since 1970, the state has experienced seven recessions of varying magnitudes, counting the recent “Great Recession.”
And budgets have grown even in periods of divided government. It’s often said that Democrats are responsible for spending creep. Yet for most of the past 40 years Washington state government has been politically divided. Rarely did a governor (only Democrats since 1984) have majorities of his or her party in both legislative bodies. So it’s clear that budget growth occurred on the watch of both parties.
In 1971, Dan Evans was half way through his second (of three) terms as governor. Unemployment was growing rapidly and spiked to 10 percent. The Republican governor had to deal with a split legislature. Senate Democrats held a strong majority while Republicans narrowly controlled the House. Passing the operating budget bill was contentious and after several rejections it was sent to a conference committee of both bodies to iron out differences. Even then, Evans used his veto pen 33 times, and rebuked legislators for cutting funds to higher education and not increasing aid for needy students while raising tuition.
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