The fiscal cards have all been dealt and it is time for budget writers in Olympia to unveil their plans for the state’s 2013-15 budget.
The last card was the state’s March 20 Revenue Forecast. We now know budget writers will have $2 billion more in revenue for the 2013-15 budget compared to the current 2011-13 budget. Here’s the projected trend in revenue increases:
- 2011-13: $30.8 billion
- 2013-15: $32.6 billion
- 2015-17: $35.5 billion
Judging from public comments, however, the way Gov. Jay Inslee and House Democrats view the expected $2 billion increase in revenue is vastly different than the Majority Coalition Caucus in the Senate.
The Senate Majority Caucus sees $2 billion more to increase spending over 2011-13 levels. Gov. Inslee and House Democrats say that’s not enough, and that additional taxes are needed to close a projected $1.3 billion shortfall assuming baseline budgeting and policy add-ons.
If this budget conflict sounds familiar it is because we had a similar debate 10 years ago when then Gov. Gary Locke, a Democrat, decided it was time to change the way Olympia thinks about budgeting.
Here is what Gov. Locke said a decade ago when announcing his Priorities of Government initiative:
We face a dilemma with our budget. We don’t want government to be any more expensive. That means an increased drag on our struggling economy. But we don’t want to compromise the quality of the vital services we provide to citizens either. State services and programs support the health of communities and the economy. One way or another, something has to give.
Past deficits have been addressed mainly by looking at the existing budget. Taxes can be raised to just keep doing what we’re doing. We know that isn’t a preferred option. Or costs are shaved until the spending plan fits the available revenue. Usually, an across-the-board reduction in costs is used to reach the goal . . .
We are convinced there is a better way. This year, we decided not to start with current spending to try to meet the forecasted revenue. Instead, we decided to look at how we should be spending our state’s money in the first place. We decided to look at our Priorities of Government.
We are looking at what matters most to Washington citizens. We are focusing on results that people want and need, prioritizing those results, and funding those results with the money we have.
Using the Priorities of Government — POG — requires agencies and budget writers to answer the following questions:
1. How much money will the state have?
2. What results do our citizens want most from state government?
3. How much money can we allocate to each result?
4. How best can we spend allocated funds to achieve the results?
One of the reasons POG isn’t used more by lawmakers is it is much harder to do than relying on automatic baseline budgeting (taking the current budget and automatically carrying the spending forward while adding increases for inflation and any growth in caseloads). That said, the Legislature has required the governor to use POG (RCW 43.88.030) when building his budget but has not placed the same requirement on its own budget building process.
To help legislative budget writers have access to the information they need to do full-fledged Priorities of Government, state agencies should be required each fiscal year to rank their activities as high, medium or low priority, with no more than one third of their total costs allocated to each ranking. Lawmakers should then direct agencies to identify at least one measurable performance outcome for each activity it wants to fund. Once lawmakers have access to this information, they can make informed decisions how to deliver the best results for taxpayers and those who rely on essential public services.
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