Budgeters’ spending spree not sustainable
Budget writers got a double dose of good news in the last few weeks: Revenues will be up and entitlement spending down. In a more perfect fiscal world, their good news would also be ours. As it is, I suspect it will just add topspin to lawmakers’ interest-group-pleasing urge to splurge.
First came the announcement that the state will spend less than expected on things like medical assistance, freeing the money for other uses. Then came last week’s official revenue forecast, more silver lining than dark cloud, that provided lawmakers another $126.5 million in estimated tax receipts. That’s silver you can take to the bank. But don’t count on the money staying there long.
Altogether, the Legislature has about $365 million more to work with than Gov. Chris Gregoire thought she had last November.
Legislators caught a break with the new money. The governor spent most of the state’s $1.9 billion surplus as she boosted spending nearly 15 percent in her $33 billion budget. That left legislative budgeteers little to do but rearrange her priorities. While some of them may have been happy to do so, most Democrats agree with her on the fundamentals.
Now they have a chance at a political win-win: more discretionary spending and more savings.
House Democrats unveiled their budget Tuesday. It’s a mare’s nest of misdirection and fund transfers, appearing to spend slightly less than the governor did and keeping a bit more in reserve. Hours after its release, they held a substance-free public hearing.
There’s a predictable rhythm to these hearings. With eyes on the clock and minds made up, lawmakers hurry the supplicants along with nods and gestures. There’s little meaningful discussion. Substantive lobbying is done behind the scenes by folks paid to play.
The way the budget is rushed through, there’s little reason for amateurs to believe they could make a difference. A proposal by Rep. Gary Alexander, R-Olympia, would have required several days of public review before legislators vote on the budget. Predictably, it went nowhere. This insiders’ game, the kabuki dance required by tradition, will continue without any unscripted intrusions by taxpayers.
Pay attention to how the budget is reported. An odd equation tends to define these things. It goes like this: The more we spend, the more we care and the more good we do. Spending becomes the yardstick for compassion in social services, commitment in education, toughness in public safety, and mobility and safety in transportation. This equation works neatly for the spending lobby, which much prefers the question “how much?” to the harder question, “how well?”
Sure, state leaders have ratcheted up their attention to results with performance audits, program reviews and the like. The governor’s Government Management Accountability and Performance program, which publicly puts department heads on the firing line, has deservedly received high marks. But the dynamic won’t restrain the impulse to spend. To the contrary, many of the “new Democrats” who champion increased accountability also believe that improved government performance can and should be used to justify government expansion.
When spending can be increased without a tax hike, few people pay much attention. While most folks would like their taxes cut, I’m not seeing much clamor for such cuts. It’s when taxes are rising that people demand reductions. (While property taxes in some places have soared, so far there’s little sign of the tax revolts of the past.) There have been few state tax hikes in recent years, thanks to a strong economy, higher business spending and strong retail sales.
But dark clouds may already be gathering and silver linings soon hard to find. Dr. Chang Mook Sohn, director of the forecast council, warns of a weaker housing outlook. The Washington Research Council reports that state tax revenues are extraordinarily sensitive to construction activity, currently at a 25-year high as a share of the economy. With state spending already growing faster than revenues in these, the best of times, the budget sinks rapidly into the red with even a mild slowdown in housing and construction spending.
The Legislature should take all the new money to the bank … and leave it there. The budget already makes too many promises taxpayers cannot afford to keep.