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Spokane, Washington  Est. May 19, 1883

Spin Control: Website offers education on one side of the state budget problem

Gov. Bob Ferguson discusses his plan to cut the state’s budget deficit by $4.4 billion during a media briefing Jan. 9 at the Washington state Capitol Building in Olympia.  (Mitchell Roland/The Spokesman-Review)
By Jim Camden For The Spokesman-Review

Whether the 2025-27 state budget faces a crisis or a challenge depends almost always on the person making the assessment.

There probably will not be as much tax money to spend on all policies, programs and salaries the state has committed to, or so people who are paid to estimate such things have told lawmakers. At least, not as much tax money as they estimated a year ago.

Although a certain amount of guesswork is required to make revenue projections, estimating expenses is fairly simple math: Write down how much we spend now; add how much more those items will cost over the next several years because of growing demand and inflation; and add in other costs for new things the state needs.

There’s some wiggle room in both numbers, which is why you might have heard the state is facing a $4 billion deficit, or a $10 billion deficit or a $14 billion deficit. The different numbers might also depend on how far out one peers into their economic crystal ball.

People who would like to revise the state’s tax system they consider too regressive might consider this a crisis that one should never let go to waste – an axiom variously attributed to Machiavelli, Winston Churchill, Saul Alinsky and Rahm Emmanuel but trotted out by politicians of all stripes when convenient.

For people who like the state’s tax system the way it is – or at least like it better than any increases to the current levels or a wholesale replacement they might face – it’s more likely to be viewed as a challenge that can be solved by understanding a bit of history.

That latter view seems to be the purpose of a new website called Washington Budget Breakdown, which details the steps that led to the current state of fiscal affairs, along with some resources to explain it further.

The website is the product of Enterprise Washington, a pro-business nonprofit that raised about $775,000 in 2023, the last year for which financial records are available, with a stated goal of providing “its businesses and association members with leading-edge research and strategies … to leverage their political resources and maximize their impact on the legislative process.”

Calling the state’s budget situation a crisis is incorrect, Enterprise Washington president Paul Graves contended in a recent interview. The state has a good economy and the amount of money the state is collecting on taxes is rising, just not as fast as once thought. That’s different than during the recession some 15 years ago, when revenue was declining year over year.

Enterprise Washington is a 501(c)(6), the kind of nonprofit that can’t make political contributions or take sides in political issues. It also does not have to reveal from whence its money comes.

“We don’t disclose our donors,” Graves said.

Although the organization is nonpartisan, the website aligns with longtime Republican views on the budget – that the state has a spending problem, not a revenue problem. Graves is a former Republican legislator who represented suburban King County in 2017-18.

As it correctly notes, the state is not really facing a deficit. Unlike the federal government, Washington cannot spend money it doesn’t have, which is a true deficit. The Legislature can’t even approve a budget that isn’t covered by the projected revenue estimates the experts release.

The information is well-sourced and footnoted, mainly from government sources, which someone interested could find on their own if they knew where to look. It’s an effort to make that information easily accessible and educate the public, Graves said.

But it only takes the education effort so far. Reading through the website, one might conclude that the Legislature has been spending like tech billionaires at a yacht dealership for the last few years, debating whether the cabin fittings should be gold or platinum.

Enterprise Washington does not, however, suggest what the Legislature should cut.

“It feels a little unsatisfying,” Graves admitted. “But public education needs to be part of this.”

The November revenue forecast, which is the most recent, suggests there will be about $610 million less than legislators expected when they set spending for the current budget that ends on June 30. To most of us, this is an amount where we might all start buying lottery tickets if the jackpot gets that high. But the current budget was based on a revenue projection of $66.4 billion, so it’s about 1% less than the previous projection.

That might have presented less of a problem if the Legislature hadn’t decided to spend an extra $2 billion last March, when the revenue projections were rosier. By November, the revenue projections were going down, not up, for the first time in a while. Still, the economic experts thought it was most likely that the state would take in about $73.4 billion, and payout about $71.5 billion, and have about $1.9 billion left over on July 1 to start paying bills in the new fiscal year. The extra money comes from things like carryover and separate funds, but we won’t get too deeply in the weeds.

The outlook for the coming years is for less new revenue than previously projected while the cost of most expenses will rise. The difference between projected revenue and expected spending growth is technically a shortfall, although if things don’t change the fall might not be so short.

How they change will occupy the Legislature for much of the session, although the heavy lifting won’t happen until after March 20, when the economic experts come up with the latest figures on how much money the state can expect for the next four years.

It might be easier to follow the debate drama armed with an understanding of the budget that Budget Breakdown provides. But remember it’s only half the equation because every major item in the state budget, whether public schools, colleges, health care, and children’s services, has a constituency and no easily cut line-item labeled “Waste, Fraud and Abuse.” Small programs represent small savings, but even they have supporters who will fight to keep them.

Competition in such budget discussions brings to mind a saying the Rev. Jesse Jackson was fond of: “Everybody wants to go to heaven, but don’t nobody want to die.”