The governor and both chambers of the Legislature have released their budgets, and one thing is certain: Nobody will get their way. But if negotiators stay rooted in reality, they can pass a reasonable budget.
Gov. Jay Inslee on Wednesday said a special session is likely, and the differences in budget proposals support that prediction.
The governor’s budget is set at $34.4 billion. The current budget is about $31.3 billion. Because of population gains and other factors, Inslee’s office estimates the state needs $33.8 billion to meet current obligations. The estimated budget shortfall is about $1.3 billion. The governor raises additional revenue by closing tax exemptions and continuing some temporary taxes, but he still comes up short. So he raids funds outside the general budget and unwisely taps emergency reserves.
The House budget is similar in that it sets aside an additional $1.2 billion as a down payment on the state Supreme Court’s ruling that basic education funding be increased, siphons outside funds and reserves, and also closes tax exemptions and continues temporary taxes.
The biggest flaws in the House and governor’s plans are the dearth of spending cuts, and the unrealistic reliance on ending tax breaks. It makes little sense, for example, to delete incentives for business research and development. The Joint Legislative Audit Review Committee has recommended $197 million in preferences be terminated. Mostly, it has been ignored.
The House will not get the $750 million in revenues needed to balance its budget passed by the Republican-controlled Senate.
The Senate budget has no new tax revenue and is set at $33.21 billion, which, according to the governor’s office, is not enough to meet current obligations. The Senate would spend an additional $1 billion on K-12 and cut higher education tuition by 3 percent; an unwise commitment. Cuts in social services would help offset the new education expenditures. While this plan is more realistic and has greater bipartisan support, it also practices some sleight-of-hand. It sweeps some outside accounts for one-time money, and the State Treasurer’s Office has criticized a move that shifts timber trust revenues to the general fund and leaves behind an IOU. In addition, the amount banked through administrative cuts looks awfully rosy.
None of these budgets will pass intact, and none of them should. If the state is going to meet its K-12 and higher education commitments – like expanding slots for science, technology, engineering and math majors – some tax breaks will have to be withdrawn or eased back. The business community has led the charge for more higher education funding, so it should be willing to step up. And the Senate’s promise of a 3 percent tuition cut will have to give way to something like the 3 percent to 5 percent hike anticipated in the House budget.
Social programs cannot absorb all the additional costs the McCleary decision will impose. Nor will speculative administrative efficiencies or raids on slim state reserves. But, with luck, an improving economy will allow lawmakers to revisit some of the harsh but inescapable choices that cannot be avoided now.