It’s the week before Christmas and the governor’s Santa suit shows wear. A coal pile sits where gaily-wrapped gifts lined the walls just two years ago. The only lists she’s checking twice contain unanswered appeals. Soon, we’ll learn how this governor sets priorities in straitened times.
She’s already told us her budget will be ugly. The gap between projected spending and available revenues through the next two-year budget period approaches $6 billion. Gov. Chris Gregoire has to present a balanced budget. What we’ll see is what’s left. What we’ll hear about is what’s not there.
Most years, the governor’s budget represents the opening bid. The Legislature typically wants to raise it. This year the recession casts a game-changing pall over the process. When lawmakers get around to serious budget building in late March, the deficit may be larger and “building” may begin with demolition.
Fans of the old M*A*S*H program will remember these as the moments that inspired Col. Henry Blake to turn to his aide and say, “It’s lonely at the top time, Radar.” And, like the M*A*S*H unit, we expect to see a lot of triage.
Nonetheless, current projections show state revenues growing about 5 percent, up $1.4 billion from the current biennium to the next. State spending, though, is estimated to climb nearly 16 percent, up $4.7 billion. Fact is, the money available for the next biennium barely covers current spending. Even as revenue growth slowed over the past 18 months, healthy reserves allowed the state to spend more than it was collecting. That unsustainable behavior created the present crisis, which has been exacerbated by the recession’s revenue contraction.
Projected growth includes pay and benefit hikes negotiated with state unions, caseload growth and inflationary increases. Some of that will quickly fall away. Last fall’s collective bargaining agreement is not now financially feasible and should be rejected by lawmakers.
This is the kind of thing that triggers talk about “Olympia cuts,” which are not reductions in actual spending but simply smaller increases than folks had desired. If I ask my boss to increase my pay by 5 percent and she just gives me a 2 percent raise, I can’t really call that a 3 percent pay cut, can I?
Such talk is too cavalier this year. Real cuts are forthcoming. Consider the countercyclical character of public spending. When jobs are scarce, more people choose to build their skills in community colleges and universities. Social and health care services also see increased demand.
As mandatory obligations increase, discretionary spending shrinks. Most of the state budget goes to educate, medicate and incarcerate, as budget writers point out. And if you take the schools, health care and corrections off the cutting board, there’s not much left.
That frame, however, misleads to the extent that it fails to acknowledge varying degrees of efficiency, effectiveness and productivity. Too often, public commitment is only measured monetarily. The bottom line is often simply the bottom line, how much money has been delivered to favored constituencies, with little regard to outcomes or accountability. What, for example, do we make of the inevitable trade-off between higher teacher pay and lower class sizes?
Recessions change everything. The focus has to shift from “more” to “better.” A government that has boosted spending by one-third in four years can surely find areas to cut. Look at what’s been added and subtract from it. Were things really so bad four years ago? If priorities have changed, take a hard look at legacy programs.
There’s no acceptable alternative. As the governor said recently, “You can’t tax individuals. They’re struggling… You can’t tax business. Some of them are hanging on by their fingernails.”
The Gregoire administration has accelerated efforts to identify savings, streamline state government, evaluate programs and define priorities. Government doesn’t swiftly or willingly adapt to changed circumstances, but it must.
Hard times test leaders. The recession will, in time, come to an end. With the right choices, our state can emerge stronger, more efficient, and better able to compete in the global economy. We should insist upon it. Pressure, after all, does great things to coal.
Richard S. Davis writes on public policy, economics and politics. His e-mail address is richardsdavis@gmail.com.
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