It’s straddle time — that awkward, cusp of the calendar, Christmas to New Year, stuck-in-the-threshold time of reflection and resolution, with one foot in the past as the other steps ahead. The short season blends opportunity, promise and possibly panic, as we realize that for all that talk about new beginnings, diet and exercise, we carry into the new year all the weight and baggage piled on in the old.
With the 2008 Legislative session just weeks ahead, it’s also a good time to think about Washington politics and policy. For lawmakers, the new legislative session consists primarily of old business.
About a year ago, Gov. Chris Gregoire proposed a $4 billion bump in the state’s biennial budget. “These are good times,” she said, “… exciting times.” Lawmakers agreed, seeing her bid and raising her some. The good times rolled.
Then, in September, the state’s top economic forecaster shaved his estimate of state revenue collections. He didn’t trim much, yet the first cut in years sent a message. Some credible economists predict a national recession. Our state is better positioned. But with a tax system that relies heavily on housing sales, consumption and construction, we don’t need a recession for the state budget to take a hit.
Recently, the governor proposed her midcourse correction in the two-year budget. This time, rather than touting new spending and exciting times, she boasts of leaving $1.2 billion in savings. Her proposed spending hike is relatively modest, but last year’s baggage takes its toll. Her budget office estimates a $621 million deficit by the end of the next budget cycle in 2011.
Providing one frame for viewing the 2008 election, Gregoire’s likely challenger, Dino Rossi, calls her budget record unsustainable. He says: “It’s time to take steps now to rein in spending…”
She says she is.
State budgeting works best when there’s an appreciation of limits. Without limits, there’s no reason to set priorities. Budget writers could just say “yes.” In 2007, to an extraordinary degree, they did. In 2008, “no” should get a workout. But the governor will have to work to convince those lawmakers who see temptation lurking in a $1.2 billion reserve.
When government can’t pay for something directly, it sometimes simply orders that others provide it. Elements of such mandates appear in several holdover policies awaiting lawmakers on the other side of the threshold: paid family leave, health care and climate change among them. Whether through taxes or regulation, state policies shape the economy.
Last year, lawmakers carved out a large role for government. When the public sector expands, private sector innovation and investment often contract.
In 2007, lawmakers passed paid family leave, appointing a task force to figure out how to pay for it. After rejecting unpalatable schemes, including a payroll tax, the task force recommended tapping the general fund. The governor rejects that notion, which would only add topspin to the state’s looming deficit. So we’re back to go, with a costly unfunded benefit and a shortage of fresh ideas.
Then there’s health care. Insurance Commissioner Mike Kreidler will push for universal coverage funded by a new employment tax. Legislators have their own ideas. Everyone wants to fix health care, but I’ve yet to see a plan that handles the three-part challenge of controlling costs, preserving choice, and paying for those who cannot afford, or refuse to buy, their own insurance.
Finally, we saw initial steps taken to combat climate change and environmental pollution. The state set goals for reduced greenhouse gas emissions, increased renewable energy and a cleaner Puget Sound. Clear paths to achieving the goals remain uncharted. There’s little consensus underpinning either the definition of the problems or the strategies for resolving them. As the economic consequences of alternative strategies become clear, the debate will increase Olympia’s contribution to global warming.
Straddle time never lasts long. Last year’s policy baggage now gets carried into the 2008 gale winds of presidential and gubernatorial politics. The coming debate will be fascinating, occasionally entertaining, and often frustrating. More important, the political decisions we make in 2008 will have lasting consequences for our state, our lives and our livelihoods. It’s time to cross the threshold.
Richard S. Davis is vice president-communications of the Association of Washington Business. His columns do not necessarily reflect the views of AWB. Write Davis at richardd@awb.org or Association of Washington Business, P.O. Box 658, 1414 Cherry Street SE, Olympia, WA 98507-0658.
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