That giant “Whew!” you heard was from Washington state legislative leaders who did not want to convene a special session to deal with a budget shortfall. Add Gov. Chris Gregoire to the chorus of the relieved, because she would’ve been faced with making across-the-board budget cuts had legislators stayed home.
The state’s budget – along with those in 29 other states – was predicated on the assumption that the federal cavalry would ride to the rescue, and it has. After much melodrama, the U.S. Senate has agreed to send more aid to the states by adopting an amendment offered by U.S. Sen. Patty Murray, D-Wash. The measure still needs to be approved by the House of Representatives, which is more than likely. Its costs are offset by spending cuts elsewhere and the tightening of some tax credit loopholes.
The $26.1 billion is earmarked for Medicaid and teacher funding. The state’s slice is estimated to be about $540 million, which more than covers the $227 million in cuts the governor would’ve faced.
However, future revenue forecasts could come up short, as they have with depressing regularity, so the state’s leaders might still need to produce more cuts to keep the budget balanced. Plus, this federal aid is one-time money. Federal stimulus has temporarily altered the 50-50 Medicaid formula, where the feds and the state kick in equal amounts. The feds are now shouldering 62 percent of the load, and Murray’s amendment extends the deadline on this arrangement by six months.
Looming over the next biennium is a projected $3 billion shortfall.
So while state leaders have gotten a reprieve, they still need to move out of crisis mode and put the state on sound footing for the long haul. This means fundamental questions about the scope of government must be answered, because revenues are continually falling short of what’s needed to sustain current programs.
Judging from a recent public forum on the budget held in Spokane, this won’t be easy or popular. Attendees listed a litany of programs that should not be cut. They also reiterated their fondness for tax cuts. This paradox is often reflected in successful statewide initiatives that call for more spending and lower taxes.
For now, legislators can proceed with their campaign or vacation plans, without daily reminders of their unfinished work on the state’s structural budget deficit. They are no doubt relieved. But the problem will be awaiting them upon their return to Olympia, whether it’s sooner or later.