OLYMPIA, Sept. 19.—Here’s the good news: Things haven’t gotten any worse. But still it looks like lawmakers are going to be facing a billion or two problems when they return to the Capitol next year.
The latest forecast of tax revenue from the state Economic and Revenue Forecast Council indicates that the recession may have flattened out at last. Washington’s economy is pretty much on track with the last forecast, in June. That’s a big switch from the forecasts of the last three years, when it seemed as if every projection was worse than the last, and lawmakers were forced to slash billions in spending plans.
But lawmakers are still a billion short of the amount it will take to maintain current programs during the next two-year budget cycle, in 2013-15. And that’s just the start. It’s going to cost another billion or so to implement the K-12 spending plans that have been forced by the Supreme Court’s McCleary decision, which held the state isn’t doing enough to fund basic education. There will be about half-a-billion dollars in the state’s rainy-day account. Add it all up and you get a problem in the range of $1.5 billion to $2 billion.
The latest forecast gives next year’s Legislature $32.65 billion to spend during the upcoming budget cycle. That’s up $21 million from the last forecast. There’s also going to be an additional $29 million to spend – or save – during the current 2011-13 cycle, which ends June 30. That makes the total pot $30.47 billion. And for those who keep track of such things, that means the state is expecting 8 percent growth.
It’s not the kind of slingshot effect you usually see when a recession ends, said Stephen Lerch, who was permanently appointed this month to the state forecaster position. The state still remains 83,000 jobs short of its peak in Feburary 2008, and it is unlikely to hit that level again until 2014. Economic performance is “certainly lower than what we would expect coming out of recession.”
The next revenue forecast – the one that will truly determine how much money next year’s Legislature will play with – comes on Nov. 14.
A Testy Exchange
Lawmakers acknowledged they have some big challenges ahead next year – either big cuts in projected spending, a tax increase, or both. And while it might not have much to do with the painful debate ahead, the situation made for a testy exchange between Senate Ways and Means Chairman Ed Murray, D-Seattle, and onetime Republican budget-writer Dino Rossi, R-Sammamish, who is filling a Senate vacancy in the 5th Legislative District until the November election.
Rossi noted that there are 250,000 more people living in the state of Washington than there were in February 2008, and even when another 83,000 people go back to work the state still won’t be even. “There is a bigger picture here, and the bigger picture is that the wounds in the budget are maybe self-inflicted wounds,” he said. “And whether it is McCleary, which is based upon a piece of legislation that was passed a few years ago, or it is going to come with Medicaid and swallowing Obamacare hook, line and sinker, believing that somehow four years from now the federal government is going to come through with the money that was promised – does anybody really believe that? I don’t. And I don’t think all the people watching on TV, all three of them, believe in that. So that is the big picture. The big thing we have to worry about, coming down the road, is what are we setting up ourselves up for? …You will deal with it. I will be done in November.”
Murray responded, “It is unfortunate that this forum is degrading into a campaign theme, versus looking at the forecast and the numbers.”
Rossi said, “Facts are stubborn things.”
“So is history,” Murray said.
Then Murray said his budget plan this last session didn’t cut education – an arguable point, given that his proposal pushed $330 million in current school-district expenses into the next biennium, and suggested that the same thing be done in future budgets, into perpetuity. Murray said the budget that actually passed the Senate, after a takeover by Republicans and three rebel Democrats, initially contained spending cuts for education. Those eventually were eliminated. Murray said, “There are some places and some levels where members are not willing to go, and I think you can see that regardless of which party is going to control the Senate floor.”