Published: Tuesday, April 28, 2009
STATE BUDGET
Lots of tough choices remain
Most of their work is done, but state lawmakers will have to come back to Olympia for a (brief, we hope) special session to iron out a few final details.
Those are nothing compared with the budget work that remains for future sessions. With more than half of the $9 billion gap between projected spending and revenues filled with one-time or borrowed money, future legislatures will face choices as tough or tougher than those tackled this session.
Perhaps the needed retrenchment of state government's mission must be done gradually. Pulling the bandage off slowly does cause less immediate pain, after all, but it also makes the hurt last longer.
Federal stimulus money backfilled $3 billion of the 2009-11 budget hole. Another three-quarters of a billion was transferred from the capital budget, which means the state is selling bonds to pay for operating expenses. That's like using one credit card to pay off another. You're doing no better than running in place, and more likely falling behind.
The state tapped its rainy-day fund, an acceptable move given how far revenues had fallen, but it also put off nearly a half-billion in pension payments -- another short-term practice that carries a bigger long-term price.
Take those sources away and you're still left with spending that's more than $4 billion higher than anticipated revenues. Major health-care reform at the federal level could provide some permanent relief, but even then, revenues are likely to come in below anticipated expenses.
The fact is that state spending grew dramatically in recent years as revenues from an overheated economy were rolling in at unprecedented levels. The housing bubble that was built on lax lending practices was responsible for much of that windfall, and it's not likely to repeat itself anytime soon. Even if voters agree to raise their taxes in the coming years -- a very big if -- it will probably only make up part of the difference.
Future legislatures will have to wrestle harder with the question of what government can and can't do. It's called prioritizing. They'll have to get more serious about reforming government -- finding efficiencies, eliminating redundancies, doing more with less. That's the kind of evolution the private sector is constantly undergoing. And that work got harder when this Legislature cut millions from the state auditor's performance-audit budget.
Yes, this was a difficult session, but current and future lawmakers should get used to it. It almost certainly wasn't the last.
Those are nothing compared with the budget work that remains for future sessions. With more than half of the $9 billion gap between projected spending and revenues filled with one-time or borrowed money, future legislatures will face choices as tough or tougher than those tackled this session.
Perhaps the needed retrenchment of state government's mission must be done gradually. Pulling the bandage off slowly does cause less immediate pain, after all, but it also makes the hurt last longer.
Federal stimulus money backfilled $3 billion of the 2009-11 budget hole. Another three-quarters of a billion was transferred from the capital budget, which means the state is selling bonds to pay for operating expenses. That's like using one credit card to pay off another. You're doing no better than running in place, and more likely falling behind.
The state tapped its rainy-day fund, an acceptable move given how far revenues had fallen, but it also put off nearly a half-billion in pension payments -- another short-term practice that carries a bigger long-term price.
Take those sources away and you're still left with spending that's more than $4 billion higher than anticipated revenues. Major health-care reform at the federal level could provide some permanent relief, but even then, revenues are likely to come in below anticipated expenses.
The fact is that state spending grew dramatically in recent years as revenues from an overheated economy were rolling in at unprecedented levels. The housing bubble that was built on lax lending practices was responsible for much of that windfall, and it's not likely to repeat itself anytime soon. Even if voters agree to raise their taxes in the coming years -- a very big if -- it will probably only make up part of the difference.
Future legislatures will have to wrestle harder with the question of what government can and can't do. It's called prioritizing. They'll have to get more serious about reforming government -- finding efficiencies, eliminating redundancies, doing more with less. That's the kind of evolution the private sector is constantly undergoing. And that work got harder when this Legislature cut millions from the state auditor's performance-audit budget.
Yes, this was a difficult session, but current and future lawmakers should get used to it. It almost certainly wasn't the last.
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