State lawmakers must make more painful cuts

The revenue forecast the budget was built on was simply too optimistic. Reality has hit hard.

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Here we go again. Washington state's budget has another huge hole.

Just three months after Gov. Chris Gregoire signed a two-year, $32 billion spending plan with seemingly healthy reserves.

Last week's updated revenue projections from Arun Raha, the state's chief economist, were grim. Tax collections are now $1.4 billion less than had been projected over the next two years. The new projection wipes out the state's reserves and leaves the budget awash in red ink.

Gov. Chris Gregoire wants to see the Legislature come back to Olympia before the end of the year to balance the budget -- meaning make more cuts or find a way to boost revenue. And Gregoire wants lawmakers to restock the reserve account so she expects a $2 billion package of cuts and taxes on her desk before lawmakers head back home.

It's going to be a difficult task given lawmakers trimmed nearly $5 billion from spending requests in approving the current budget. Any cuts are going to be felt by some segment of the population.

The cause of the projected shortfall is being placed on the Great Recession. And, to a great extent, that's probably true.

However, economic forecasters and the Legislature must also shoulder a chunk of the responsibility for this mess. Raha's two-year forecast (that was accepted by lawmakers) called for a $4 billion increase in tax revenue over the previous two-year period.

While it looked at the time the state was coming out of the Great Recession, it was unrealistic to expect growth of 7 percent a year.

Raha's optimism, and the Legislature's willingness to jump on board, leaves Washington in a tough spot.

Most state employees have seen their pay frozen (some have even had pay reduced), higher education has already been slashed 8 percent, basic funding for K-12 education is protected by the state constitution and many social programs can't be touched because they are mandated by the federal government.

Further cuts won't be merely from requests but from already approved funding. These cuts are real and won't be pretty.

The state's forecaster has had the optimism knocked out of him by the latest economic numbers.

"We are in the fragile aftermath of the Great Recession, where a return to normalcy seems like a mirage in the desert -- the closer we get to it, the further it moves away," Raha said at a presentation Thursday.

Raha sees no clear sign the state's economy will rebound soon.

"The Great Recession is turning out to be a never-ending nightmare," he said. "I truly wish I could assure you this nightmare is about to end, but I see no end in sight."

Lawmakers brought much of this on themselves, as well as the state, by allowing themselves to believe the sunny revenue forecast presented last spring. Now is the time to take a more pragmatic approach -- wince -- and make the cuts necessary to balance the budget.

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