Band-Aids aren’t a cure
Published 3:38 pm Thursday, June 17, 2010
Despite $800 million in tax hikes that are just going into effect, the Band-Aids are already falling off the state budget.
Thursday’s quarterly revenue forecast showed state tax collections falling another $200 million for the rest of the current budget cycle, which ends about a year from now. Add to that the growing prospect that Congress will not approve $24 billion in additional, one-time Medicaid help to states (Washington assumed $480 million of it to balance its budget), and a special legislative session this summer or fall looks like a necessity. Just as legislative campaigns are in full stride.
The alternative would be the blunt instrument of across-the-board cuts, which treats all state services equally, as if certain ones (education, public safety, those that protect the most vulnerable) aren’t higher priorities.
Congress is balking at the additional Medicaid funds out of deficit-spending fatigue. States will continue to pressure their delegations (roughly have of them passed budgets counting on the extra aid), but test votes this week showed supporters in the Senate need to change at least nine members’ minds. The House would also have to reverse an earlier vote.
The prospect of having to leave the campaign trail and return to Olympia to take unpopular action isn’t a happy one for legislators. But it’s one of their own making. Despite clear signs the past two years that revenues would not rebound to recent levels anytime soon, they avoided making major structural changes to state spending, opting for smoke-and-mirrors approaches like shifting money out of dedicated accounts into the general fund, or delaying pension fund contributions.
With a budget gap of $3 billion already expected for the 2011-13 biennium, and state economist Arun Raha predicting that “the recovery will be slow and uneven,” the Band-Aid approach won’t be enough. Lawmakers and the governor must get serious about changing expectations of what state government can deliver.
The House Ways and Means Committee will meet next week to discuss a series of budget reform efforts, along with ways for state agencies to improve quality and efficiency.
That’s all good, but the discussion also needs to be about simply doing less. Closing another multi-billion-dollar gap will require substantial reductions in the state payroll. That means setting priorities. Truly core services must be identified and funded, with what’s left over either eliminated, contracted or privatized.
More Band-Aids, in the form of across-the-board cuts or nickel-and-dime tax hikes, will only delay the surgery that’s really needed.
