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State revenue up, but is it enough?

OLYMPIA – Revenue projections for the next two years suggest the state budget will grow by about $2 billion. That’s more than some legislators expected and more than enough to fuel the debate between Senate Republicans and House Democrats over spending cuts and tax increases.

The March economic and revenue forecast says the state is slowly coming out of the recession, with housing starts and car sales up, overall consumer confidence down and significant questions about future hits the state coffers could take from with economic problems in Europe, a slowdown in China or the continuing budget stalemates in Washington, D.C.

We still see lots of uncertainty out there,” Steve Lerch, the state economist, said. Although legislators were bracing for a drop of as much as $300 million, the revenue forecast didn’t change significantly from December.

The state should have about $32.5 billion in its general operating fund for the two-year budget cycle, which begins July 1. That would be up from about $30.5 billion it will collect, and mostly spend, for the biennial cycle that ends June 30. . .

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That extra $2 billion wouldn't be enough to cover all the current programs, policies and salaries, and make changes to the public school system the state Supreme Court is requiring.

Some programs will have to be cut, Sen. Andy Hill, chairman of the Senate Ways and Means Committee said, because coalition controlling hat chamber isn’t going to raise taxes. What programs and by how much will have to wait five to 10 days for the Senate budget.

On an easel in the hallway on the Republican side of the Senate, someone placed a large sign that said “$2 billion more”.

“We’re still finalizing things,” Hill, R-Redmond, said. “In general, the goal is not to extend expiring taxes and not to initiate new ones.”

Some additional revenue will have to be found, Rep. Ross Hunter, chairman of the House Appropriations Committee said, because with inflation, growth in demand for current programs and new education costs to meet a Supreme Court mandate, there's not going to be enough money. The House Democrats’ budget will be released shortly after the Senate budget.

“It’s a hard problem to resolve but this doesn’t make it worse,” Hunter, D-Medina, said of the revenue forecast. “The revenue growth and the population growth tend to cancel each other out, over time.”

Sen. Mark Schoesler, R-Ritzville, said the Legislature shouldn’t just adjust the current budget for inflation, but instead should set priorities and fund them first. It should budget like a family or a small business, deciding what it can afford, what it can’t, and what it needs to change.

But Hunter said the state budget is more complicated than a family or small business spending plan, with $32.5 billion, some 400 different account, federal money and double-entry bookkeeping. “If you simplify it too much, you can actually misstate what’s going on.”

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Jim Camden
Jim Camden joined The Spokesman-Review in 1981. He is currently the political reporter and state government reporter in the newspaper's Olympia bureau office.

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