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SOUND OFF Budget crunch is nothing new
Our state has faced major revenue shortfalls in the first three years of every decade going back to the 1980s. The sharp revenue drop-offs in the early 80s and 90s created huge budget shortfalls for the state, and on both occasions resulted in large, onerous tax increases. At last months state Revenue Forecast Council meeting, the governors budget spokesman quipped that we should skip the first few years of every decade, when the economy and state budget revenues have repeatedly faltered.
My suggestion would be for lawmakers to stop repeating the same mistakes that lead us to this reoccurring budget mess. Specifically, we must control spending and create budgets that are sustainable over the long term to avoid this type of boom-and-bust budget cycle that weve experienced over the last two decades.
The current budget situation is difficult, but weve faced worse. In 1993 the state faced a shortfall of $1.5 billion in a $16 billion budget. Thats an 8.9 percent deficit. This year we have a $1.2 billion budget gap in a $23 billion budget, which is a 5.2 percent deficit. In both cases its a great deal of money, but the current budget shortfall should be manageable without harming vulnerable citizens and without hurting taxpayers.
And if anyone tells you we cant pay for important services without raising taxes, consider this: The latest forecast shows we expect to collect $21.2 billion in general fund tax revenue during the 2001-03 biennium down more than $800 million from the September forecast, but $350 million more than what the state actually spent during the1999-2001 biennium, while we were still in a period of relative prosperity. That means we can spend 1.5 percent more this biennium than we did last biennium without even touching our reserves.
So while we may be facing a tight budget situation, is it really so bad that we should be talking about cutting the most basic services for those who are truly in need of assistance? I dont think thats appropriate, nor do I think its necessary. Do we have to back off on our commitment to protect our quality of life by maintaining clear air, clean water and healthy ecosystems? We can still do these things with the resources we have.
What we cant afford to do, and what we shouldnt do, is continue paying for poorly conceived programs that fail to achieve meaningful benefits for citizens.
To pay for all the commitments in the current operating budget, the state would be $647 million in the red, even if every penny of the states emergency reserve is spent. This is what many of us in Olympia warned would happen when the current budget was adopted in June. Even at that time, we knew the budget spent over $600 million more than expected revenue and used a great deal of one-time money from savings accounts to fund ongoing programs. We spent more than we could afford, and for all practical purposes, the check has bounced.
Still, theres no need to panic. It simply means we have to make responsible decisions the decisions that should have been made six months ago. But we shouldnt rush to eliminate truly critical functions of government.
When were spending more than we have coming in, there are really only two answers: reduce spending or raise taxes. My preference is to do what real working families must do when they fall on hard economic times. We need to establish clear priorities, focus on the basic services of government, especially those that provide the necessities of life for citizens truly in need. Lawmakers must separate our needs from our wants.
This is easier said than done, to be sure. But the alternative is almost unthinkable. To impose a greater tax burden on families at a time when many are worried about losing their jobs would be a travesty. I can think of no better way to prolong and worsen our current recession than to add higher taxes to the mounting concerns of working families.
Weve learned that we cant tax and spend our way out of these economic doldrums. There is no substitute for living within our means, and the only way we can expect to solve the problems that lie before us is to acknowledge the mistakes that have caused this budget shortfall and those weve experienced before.
As the state Legislature meets over the next few months, well debate our states priorities. The discussions we have and the decisions that we make will be critical to resolving this budget crisis. The easy thing to do would be to raise taxes so that no spending reductions have to be made, even for low-priority programs that some special interest or another says it wants. The more difficult and more responsible approach will be to make the hard decisions to reduce spending on the things someone wants, so we can pay for and protect the services citizens truly need, without raising taxes. Time will tell if were up to the challenge.
Rep. Barry Sehlin, R-Oak Harbor, is the ranking Republican on the House Appropriations Committee.