Rep. Barry Sehlin
Devising a responsible budget for your family or business requires discipline. You know your income. You also know your required expenses for rent, food and housing. You don’t have the luxury of budgeting to spend more than your income simply because you want a new automobile, need a vacation or want a bigger house. If you do, you’ll be in deep financial trouble very soon.
The same discipline is required for those responsible for devising government budgets. Those responsible for Washington’s budget have abandoned discipline in favor of shortsighted deficit spending. In June the majority Democrats adopted a budget that promised to spend nearly $700 million more than the state expected to receive. Revenue forecasts continued to decline during the last half of 2001 and into 2002. When your income declines you have only one choice. You reduce your expenses to match your income. This year the majority party chose another option.
This year’s operating budget does reflect a small reduction in spending. Relatively speaking, it’s very small. Lawmakers were faced with a $1.6 billion budget hole this year, and the Democrats’ response was a net reduction in spending of $298 million. These cuts amount to about a 1.3 percent to the state’s $22.8 billion budget.
It’s also worth noting that this budget, drafted last June, increased spending over the previous biennium by more than 8 percent. The net effect of the cuts made this year was to merely slow the rate of growth in government to about 7 percent.
So how did majority Democrats continue to pay for programs with this enormous revenue shortfall? The operating budget passed last week in Olympia will spend $1.4 billion more than forecast revenues by using one-time money to pay for ongoing programs. It relies on borrowed money, spends one-time reserves, and siphons residual savings from other accounts to pay for ongoing programs to get us through the next 15 months. But taxpayers will be paying the bills on this budget for decades. The most egregious example of undisciplined budgeting is a scheme called tobacco "securitization." That’s a fancy word for bonding, or long-term debt. This budget requires Washington to sell off a portion of our future tobacco settlements in exchange for $450 million in one-time cash to help pay for operating expenses in the 2003 fiscal year.
We fought a long, expensive legal battle to gain this money from tobacco companies. It’s supposed to provide health care and anti-tobacco programs for 30 years or more. Rather than make the disciplined decisions everyone knows are needed, the majority party elected to sacrifice 30 years of health care to delay those decisions for a few months. This proposal would spend the cash on operating expenses over the next 15 months — the money will be gone by June 2003, but the taxpayers will be paying back this loan for 30 years.
No business, and no government in the world believes this is a responsible budgeting approach. It’s like a family maxing out credit cards to pay for groceries. Eventually, they’re out of money, they’re out of credit and they still have a family to feed and bills to pay from their mounting debt.
Even after spending down our limited reserves, using $450 million of borrowed money to pay bills, and promising to spend federal money the federal government says it may not give us, the budget that was passed simply fails to fund the things that everyone agrees should be our priorities. The budget all but eliminates funding for local communities to provide critical public safety and emergency services like police officers and sheriffs’ deputies. After selling off future health care dollars, it even reduced funding for health care for low-income families. Minority Republicans proposed several times to use the tobacco revenue stream to pay for these kinds of critical needs on an ongoing basis. But out of desperation to plug the hole in the current budget, the majority repeatedly rejected those proposals.
In the end, by their own admission, the Democrats’ budget will leave the state with a $1 billion shortfall when lawmakers return next year. They say they didn’t have a choice, but I think the choice is clear. We have to put the state on a course for recovery.
The only way out is to change the underlying premise upon which we begin drafting the state’s budget. The outcome of this year’s budget process would have been entirely different had the process begun with an acceptance of the premise that no family, no business and no government can continue spending more than it brings in. Accepting that premise would have required a whole new level of discipline. It would also have forced those in the majority to make many different decisions. It’s impossible to speculate on what those decisions might have been. It’s not impossible to understand the future hardships this budget will bring.
Government revenues are sluggish because of our weak economy, but the weak economy is hurting families too. We can’t solve the problems of this state by repeating the same mistakes that got us here, and we can’t revive our economy by creating a government that assumes the kind of debt and unsustainable spending required in this year’s budget. All we’ve done is delay the decisions we all know must be made.
State Rep. Barry Sehlin, R-Oak Harbor, is the ranking Republican member on the House Appropriations Committee.
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