As promised, Washington Gov. Chris Gregoire has called for restoring more than $700 million in programs she slashed in her earlier, no-new-taxes approach to filling the state’s $2.8 billion budget gap.
Also as promised, she is relying even more heavily on program cuts to get the state through the 2009-’11 biennium.
The governor’s plan isn’t pretty, but it’s plausible. And in a recessionary mess of this magnitude, pretty isn’t possible. In coming days, the Legislature will roll out its own package, but until then, the only specifics subject to examination are in the governor’s plan.
It wouldn’t take much to nitpick an item or two – as legislative Republicans have been doing without presenting a comprehensive blueprint of their own – but, with one significant shortcoming, the governor has produced a defensible response to a fiscal calamity that has made revenues disappear by the billions.
What Gregoire’s plan needs, though, is a sunset provision. The tax increases should expire no later than June 30, 2013, the end of the next biennium. Strategies designed for extraordinary conditions should not be open-ended. They should be used to allow substantial government restructuring that will make them unnecessary if the economy is slow to recover.
Gregoire deserves credit for avoiding a general sales tax hike, which would have been a harsh brake on recovery – especially in a border community such as Spokane where big-ticket purchases already tempt Washingtonians across the Idaho state line in search of tax savings. She would merely extend the sales tax to candy and gum, nonessential purchases presently sheltered by the sales tax exemption for groceries.
The governor’s focus on discretionary purchases also produced modest taxes on carbonated drinks and bottled water.
A hike in the state’s hazardous substance tax is more significant, but ultimately it’s targeted to pay for the cleanup costs associated with the contaminants they produce.
The governor’s expectations for $435 million in federal Medicaid relief may be optimistic (see columnist David S. Broder’s commentary on this page) but she’s savvy enough to count on that as a cushion rather than using it to pay for immediate needs.
To repeat, no one should be happy with either these tax hikes or the substantial program cuts that are part of the equation, but with a problem of this nature, any solution is going to induce widespread pain.
But the impacts of this recession may be prolonged, so the state needs to do more than resolve this biennium’s shortfall. It needs to reform and downsize state government. The governor has pledged to do that. She’s already taken some bold steps with regard to closing a number of state institutions. If we’re looking for leaner, more efficient state government, closing offices and eliminating some services are part of the equation.
Economists widely predict that the nation, Washington included, will not return to pre-recession economic levels anytime soon, so a committed plan for downsizing must be undertaken.