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GUEST OPINION | Washington has a spending problem, not a revenue problem
Back in 2005, forecasted revenue was projected to be $1.7 billion higher than the previous biennium. Gov. Chris Gregoire signed a budget that spent nearly a billion dollars more than the state was taking in — despite an increase of incoming revenue. She did that knowing full well that the Legislature was overspending. “I don’t like it. It’s not sustainable. It’s what’s wrong with the budget in the state of Washington,” said Gregoire.
Two years later, the state had a revenue increase of $4.7 billion over the previous biennium. Yet the Legislature passed and the governor signed a budget that spent all of that additional revenue, plus an additional $1.3 billion. Once again, the Legislature spent more than the state took in, despite a sizeable increase of incoming revenue.
In the 2009-11 budget approved two years ago, the Legislature spent $885 million more than it took in.
Now fast forward to this year. During the March 17 revenue forecast, it was announced incoming revenues would be down by nearly $800 million. However, that’s $800 million less than the revenue increase projected in November. The real story is that Washington is expecting nearly 14 percent more revenue over the next two years than the previous two years.
So what about the so-called $5 billion shortfall for the 2011-13 biennium and the “cuts” that drew protesters to Olympia?
It comes down to definitions.
In Olympia, a “cut” is often a decrease of an expected increase. For example, the 2009-11 budget spent $31.4 billion. To continue the same rate of spending, budget writers say the new 2011-13 budget should be more than $36 billion. This also assumes spending of $2.3 billion in federal bailout money the state received two years ago. However, that was one-time money the state will not be receiving again.
Revenue for 2011-13 is forecasted at $32.6 billion. So the “shortfall” is the difference between what budget writers want to spend and the forecasted revenue.
The House Democrat budget proposal for the 2011-13 biennium would spend $32.4 billion. Since this proposal doesn’t spend $36 billion as budget writers wanted, those would be the “cuts” you hear about. Nevertheless, the proposed House Democrat budget would still spend $1 billion more than the previous biennium.
The bottom line: We don’t have a revenue problem in this state. We have a spending problem.
Even though the new budget proposal would increase spending, there are groups who wish to spend even more tax money. Protesters have come to the state Capitol yelling “cut tax loopholes,” which is double speak for “increase taxes.”
The term “loopholes” conjures images of a mistake or an oversight that allows for ways to skirt paying taxes. That’s not the case. In Washington, we don’t have tax loopholes. We have tax incentives. The distinction between the two is important because our state’s tax incentives are no accident. They were enacted deliberately for the specific purpose of creating jobs.
For example, in the first 10 years after the Legislature adopted a tax incentive that exempted sales tax on manufacturing and equipment, it created 285,000 new jobs. Remove tax incentives and you take away jobs.
More than 317,000 people in Washington are out of work, including 6,400 in the 39th District. We shouldn’t put more people out of work in a misguided attempt to increase government revenue. The best way to increase revenue to the state is by getting Washington working again.
We need to get government spending in line with today’s economic realities. Businesses and families have cut back. Few people have seen a 14 percent increase in their incomes. So when protesters say state government needs more of your hard-earned money when it’s expecting an additional $4 billion in revenue over the previous biennium, I say “nonsense!”
It’s time to change the status quo in Olympia. We need to reset and reform state government, adopt a balanced and sustainable budget, and provide policies that will get Washington working again.
Rep. Dan Kristiansen, R-Snohomish, represents the 39th Legislative District. He can be contacted at 360-786-7967 or email him through his website at www.houserepublicans.wa.gov/Kristiansen.