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Washington state's budget: My how you've grown

A look at the budget's changes over decades shows much bigger numbers but not as big as you might think. And these numbers reflect shifting public values, demographic shifts, federal programs, and bipartisan agreement over the nature of the growth.

Washington Gov. Chris Gregoire

Washington Gov. Chris Gregoire CTED

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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Comments:

Posted Thu, Aug 11, 10:13 a.m. Inappropriate

Dick, thanks for this good fact check on McKenna's statement about the budget doubling. It also seems the headline is misleading given the article's finding that the general operating budget has grown only a few percent in real terms, though the capital budget has grown about 50 percent. Still, neither is even close to doubling.

Posted Thu, Aug 11, 10:25 a.m. Inappropriate

A similar analysis of 'tax burden' would also be helpful.

Are we paying more or less in taxes, fees, etc. - in raw dollars and as a portion of our incomes, adjusted for inflation - than we did forty years ago?

I suspect the 'we're taxed too much' crowd is just as wrong as the 'spending has doubled' crowd.

WashPIRG

Posted Thu, Aug 11, 1:28 p.m. Inappropriate

This would be a good article if written from a strictly factual perspective, without leaning to one party or the other. Proving that "it wasn't doubled" is a waste of valuable reader time.

Don't tell us what it isn't. Tell us what it is.

Posted Fri, Aug 12, 7:34 a.m. Inappropriate

Data from the Tax Foundation indicates that Washington State's level of taxation as a percentage of income and in its relationship to other states has not changed appreciably over the past 20 years. I don't see evidence in this data that Washingtonians are over-taxed. There is some degree of evidence to suggest that the state revenue as overly tied to the economy and thus experiences boom-and-bust cycles.

Year Rate Rank (1 is highest)
1977 9.6% 31
1978 9.7% 26
1979 9.2% 29
1980 8.6% 33
1981 8.2% 38
1982 8.4% 35
1983 9.0% 28
1984 9.2% 28
1985 9.0% 34
1986 9.2% 28
1987 9.2% 28
1988 9.1% 34
1989 9.1% 34
1990 9.3% 31
1991 9.4% 31
1992 9.5% 29
1993 9.6% 30
1994 9.7% 27
1995 9.9% 22
1996 9.7% 22
1997 9.5% 25
1998 9.2% 30
1999 8.8% 34
2000 8.5% 37
2001 8.6% 34
2002 8.9% 32
2003 9.1% 29
2004 9.3% 25
2005 9.2% 27
2006 9.2% 31
2007 9.2% 30
2008 9.4% 29
2009 9.3% 29

www.taxfoundation.org

Posted Fri, Aug 12, 1:20 p.m. Inappropriate

Re: Tax Foundation
There's stories and there's aggregating of numbers. In both, the outcome depends upon the definitions and assumptions made at the start.

Please see http://www.taxfoundation.org/files/wp4.pdf

There you will find the explanation of methodology, along with the foundation's state-to-state comparison of "per capita income" (including capital gains), "taxes," and the rates that fall out of the definitions and assumptions made.

The big problem with the per capita income used here is the lack of accounting for distribution of income and avoidance of affordability, although some effort is made to back out Medicare/Medicaid.

That said, not very surprising to find DC (8 in rate "if ranked") leading the 2008 per capita pack at $70,700 and Mississippi (36 in rate) bringing up the rear at $31,800. A little more surprising is Wyoming (ranking 48) at $53,200 close to the top, while Arizona (ranking 41) at $38,200 close to the bottom.

Wyoming is amazing in another way: 72% of its taxes collected per capita are from out-of-state residents, second to 82% for Arkansas (ranking 50). Number 1?

afreeman

Posted Fri, Aug 12, 4:10 p.m. Inappropriate

Thanks for this thoughtful and nuanced look at what's happened to the state budget over the decades. It's vaulable insight. I hadn't realized how bad things were around here in 1970, but now that you mention it that was about the time we had the "last one leaving Seattle please turn out the lights" billboard.
Robert McClure

rmcclure

Posted Sat, Aug 13, 9:15 a.m. Inappropriate

There are several State Human Rights Commissions as well as boards and all of them are fairly inefficient. I am a minority person working for the State and have tried to get help from each one in the past but to no avail. These commissions and boards do not produce quantifiable data therefore their claim for success is just that. States should defer to Federal Equal Rights Commission and abolish State Human Rights Commissions and boards. Why keep feeding a cow that aint giving no milk?

Posted Mon, Aug 15, 7:53 a.m. Inappropriate

Here’s a chart that LEAP put together showing the per capita adjusted spending based on 2011 constant dollars since FY 1970: http://www.washingtonpolicy.org/sites/default/files/OperatingBudgetHistory.pdf

LEAP broke the spending down by total budgeted funds and total state funds. Total budgeted funds includes the transportation, capital and operating budgets including federal funds and grants.

Per capita adjusted spending (2011 constant dollars):

Total budget funds FY 1970: $2,084
Total budget funds FY 2010: $4,770
Increase per capita constant 2011 dollars: 129%

Total state funds FY 1970: $1,504
Total state funds FY 2010: $2,704
Increase per capita constant 2011 dollars: 80% (Had been has high as 99% in FY 2008 before budget reductions)

jmercier

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