Friday, September 21, 2012
The good news from Wednesday’s state economic forecast was that there wasn’t bad news.
The latest state government revenue forecast is a bit more optimistic than the previous forecast. It expects the state to bring in about $29 million more in the current two-year budget period.
Over the last few years the forecasts have gone from worse to horrific. The governor and Legislature have had to dig the state out of budget holes up to $5 billion because anticipated spending outpaced tax revenue.
The additional revenue, given the two-year budget of about $30 billion, is barely a blip. Yet, it means lawmakers won’t have to gather in Olympia for a special session. The state’s money trouble is essentially small enough that it’s not a crisis.
Still, lawmakers are going to have to make some tough decisions on what will be funded. Both gubernatorial candidates have made it clear they want to put more money into education.
And while gubernatorial candidates Republican Rob McKenna and Democrat Jay Inslee have said they oppose tax increases, some in Olympia — including Senate Ways and Means Chairman Ed Murray, D-Seattle — believes the state simply can’t cut any deeper.
“To be really honest with the public ... there are some places and some levels that (legislators) are not willing to go,” Murray said. He suggests new revenue is needed.
We see the need to continue to reduce state spending as the key to long-term stability.
Gov. Chris Gregoire, a Democrat, understands this. She pushed for a supplemental budget this year that focused on reducing programs that grow more expensive over time.
“The supplemental budget passed preserves critical programs, including education, and sets our state on a more sustainable path,” Gov. Chris Gregoire said last spring. “Reaching this point wasn’t easy.”
Agreed. So now is not the time to regress.
This means taking a cautious approach to areas such as Medicaid coverage. While it is critical to keep the safety net strong for low-income people, expansion of healthcare must be measured.
Recent budget shortfalls have been driven by rising costs in health care and social services.
In 2011, for example, the state estimated it would have to spend 7 percent more over the next two years while trimming what it spends on higher education in real dollars (not adjusted for inflation) by at least 8 percent. Social service spending increased by more than 12 percent.
Lawmakers must focus on containing costs to ensure the path is sustainable.