As a result of past spending decisions and an economic downturn, lawmakers in Olympia are facing many difficult choices to reset state spending. Though tax revenues dropped for the current budget, they are projected to increase by $4.5 billion for the 2011-’13 budget. While this should be cause for celebration, lawmakers for years have been spending more than taxpayers were generously providing, creating a structural budget gap that now threatens popular programs. Already, some special interest groups are talking about asking taxpayers to “buy back” any cuts with new taxes on the 2011 ballot.
In recent years, Olympia has spent like the good times would last forever. Unfortunately, the bill is coming due. Under the governor’s 2011-’13 budget proposal, state spending would be $32.3 billion, up 27 percent since 2003. Even if the governor’s proposed cuts are approved, state spending still increases by $1.7 billion. Taxpayers should know $2 billion of the state’s projected $5 billion shortfall is the result of accepting one-time federal stimulus dollars. Many of the programs propped up with these bailout dollars are now being slated for elimination. Now we know why governors in other states were reluctant to jump at the federal cash.
How can we fix the budget mess and help take the state off the boom-and-bust roller coaster?
First, the state could restore decisions over state employee compensation and benefits to the Legislature. State taxpayers have a right to know there are nearly 109,000 full-time equivalent state employees who pay little for their health care benefits, compared with the private sector. If state FTEs were a city, they’d be the fifth largest in Washington.
Right now, state taxpayers cover 88 percent of their medical premiums and 100 percent of their dental coverage. The governor’s recent agreement brought the taxpayer’s share down to 85 percent for medical, an improvement, but not anywhere near the private sector average.
Because of the 2002 collective bargaining law, unions now negotiate secretly with the governor, while the people’s representatives only vote yes or no on the deal. Repealing collective bargaining places those decisions back in the Legislature, allowing lawmakers to balance personnel spending against other pressing public needs.
Second, lawmakers could repeal Initiatives 728 and 732. The measures sought to reduce class sizes and give teachers automatic pay increases. The trouble is, no funding was included and voters rejected new taxes to pay for the initiatives in 2004 and 2010. Repealing them would take their cost off the state’s books and reduce the deficit without canceling any current program.
Third, proactively use performance-based competitive contracting. State agencies have the authority to seek savings through contracting out certain services to the public, but it’s seldom used. Agency managers say the process is too complicated and confusing. In 2009, Washington Policy Center asked how many competitive contracts had been requested or approved under a 2002 law. The answer was zero. The problem is, contracting out is subject to collective bargaining. If that roadblock were removed, the state could save 10 to 20 percent on services it contracted.
Fourth, re-enact a meaningful state spending limit while securing more boom-time revenues for the state’s emergency reserve account. If we don’t save more for the bad times and keep spending in check once the economy recovers, we’ll face another budget deficit down the road.
Fifth, eliminate the Commission on Salaries for Elected Officials. In 2009, numerous elected officials testified before the commission, asking members not to raise their salaries in light of the economic situation. Instead of forcing lawmakers to beg a commission not to raise their pay, the board could be eliminated and the decision could revert to the Legislature. That would save nearly $400,000 per budget.
Finally, adopt the Taxpayer Choice Account. This allows taxpayers who feel they are not paying enough to send more to Olympia. Bill Gates Sr., for example, should have no trouble sending more cash to Olympia, since he supports an income tax. Gov. Gregoire also supports an income tax, so setting up this account, as other states have done, would allow supporters to pay it voluntarily.
These are just some of the solutions available. State taxpayers have a right to know they exist, and they expect their elected officials to make meaningful reforms.