Washington State legislators approved nearly $600 million in budget cuts to shrink a $1.1 billion deficit in a one-day special legislative session.
There was bipartisan agreement among the state’s budget leaders prior to the session about what budget changes would be made. Some of the cuts included nearly $50 million from the Department of Corrections, $50 million from K-12 education, $28 million from the state’s Basic Health insurance plan for the poor, and $51 million from higher education.
Normally these types of cuts would have been met by fierce resistance from Democratic lawmakers. However, Washington’s midyear deficit as a percentage of its total budget was 7.1 percent, making it the third-highest in the nation, according to The Wall Street Journal.
Lawmakers have until June 30 to close the state’s budget in the black, which lent a sense of urgency to the December special session and quieted what would normally would have resulted in angry clashes.
One-Time Funds, Transfers
Cuts weren’t the only budget-balancing measure employed during the special session. Lawmakers used $208 million in onetime federal dollars that were supposed to be dedicated to education. In addition, they transferred $51 million from dedicated accounts to the state’s general fund and passed a tax amnesty program for delinquent taxpayers that lawmakers hope will bring in $44 million in additional tax revenue.
Budget watchdogs say these moves raise red flags regarding the state’s already precarious budget situation.
“This was yet another manifestation of lawmakers’ seemingly endless appetite for using onetime, dedicated funds to pay for ongoing operating expenses. These gimmicks do not address the heart of the state’s problem: Too much spending,” said Bob Williams, a senior fellow of the Evergreen Freedom Foundation and president of State Budget Solutions.
Williams points out the state increased total spending by $4.2 billion over the last two years, despite the economic downturn, and that the $1.1 billion deficit estimate assumes the use of all of the state’s reserves and more than $1.2 billion in transfers from dedicated accounts.
“Washington’s spending trajectory is simply not sustainable. The more gimmicks legislators use, the bigger our incoming budget problem becomes,” Williams said.
Still Looming Deficits
Washington’s deficit estimates for its next budget (2011-13) range from $4.6 to $5.3 billion. Most of this is due to replacing federal stimulus dollars, backfilling pensions to make up for reduced contributions during the last several years, and catch-up funding for class size reduction and teacher COLAs that were suspended during the current budget.
The reductions made during the one-day special session will ease the current deficit but do little to stem the multibillion-dollar incoming deficit. Nonetheless, Washington Governor Chris Gregoire (D) told the Seattle Times, “I’m very proud of what the Legislature was able to do [during the one-day session] and how they did it. I think it’s historic, the bipartisan way in which they stood up to the most challenging time in 80 years.”
Critics don’t buy it.
‘Only Marginal Help’
“The budget reductions taken will, at best, only marginally begin to help the state’s fiscal situation,” said Rep. Glenn Anderson (R-Fall City) in a statement. “This is a very poor start considering the even larger budget deficits the state will be facing in January.”
The week after the special legislative session, Gregoire released her proposed supplemental budget, which uses an accounting trick to shift part of the state’s 2011 apportionment payment to school districts from the last business day of June to the first business day of July. This will result in $253 million in savings for the 2009-11 budget, and $253 million in increased costs for the 2011-13 budget.
“The incoming budget problem is big enough without passing the buck yet again. If you think the current budget is in trouble, wait until lawmakers start working on the next one,” Williams said.
Amber Gunn ([email protected]) is director of the Evergreen Freedom Foundation’s Economic Policy Center.
