Sunday's Everett Herald carried an op-ed by AWB president Don Brunell and Washington Roundtable Steve Mullin urging responsible state budgeting. Don and Steve were writing as representatives of the Coalition of Washington Business Organizations, a group of major state business and trade associations.
Here's the crux:
Our state government cannot continue to spend more than it takes in, which is exactly what state fiscal leaders are proposing by increasing spending 15 percent while revenues grow at a rate of 7.5 percent. Coming on the heels of a 2005-2007 budget that increased spending 13 percent, this level of increased spending virtually guarantees substantial shortfalls in the foreseeable future. In just four years, state spending will have increased roughly 30 percent.
Let's look at some recent budget history, going back to 1995-1997, when state spending totaled $18.4 billion. Growth in the next three biennial budgets averaged 9.9 percent. Reflecting the effects of the recession, spending in the 2003-2005 biennium grew just 4.5 percent. Perhaps some of the 13 percent increase in 2005-2007 may be attributed to catch-up spending. No such justification, however, exists for a 15 percent increase this year.
And this is what's necessary to bring things back into balance:
Lawmakers would also be wise to take the opportunity now, while the economy is strong, to prepare for the inevitable downturn that will come. With state spending approaching $34 billion, a $664 million reserve (as proposed by the state House of Representatives) is clearly inadequate. We recommend building the reserve to 5 percent of spending, about $1.7 billion, and securing the reserve in a Constitutionally-protected rainy day fund. That goal is within reach now.
Our state has a rare opportunity to develop a long-term, sustainable budget plan. If lawmakers get it right, they can put an end to the cycle of boom-and-bust that has plagued Washington for decades. If they get it wrong, they'll have put our economic competitiveness at risk and jeopardized essential education, health care and transportation programs.
Less than a month remains in this legislative session. Let's get it right.
Time's short. But there's time enough to trim the growth in spending and adopt a sustainable budget with an adequate reserve.
