Joe Zarelli isn’t getting much of an audience these days. That’s not how things were in 2004, when he chaired the state Senate’s powerful budget-writing committee. But that’s when Republicans held a majority in the Senate – a distant memory.
But as the ranking minority member of the Ways and Means Committee, he’s still the GOP’s leading budget voice in Olympia, and has had plenty to say as the governor, then her fellow Democrats in the House and Senate, rolled out their spending proposals for the 2007-09 biennium. Given their overwhelming majorities, Democrats can ignore Zarelli if they like.
Just because they can doesn’t mean they should.
Washington’s hot economy, fueled by the construction boom, has revenues pouring in to the state treasury. Recent forecasts added another $126 million in unanticipated tax revenue, and $240 million in reduced costs because of lower-than-expected demand for state services. That gives lawmakers a record $2 billion in extra spending capacity, and they’re eager to use it.
Much of the new spending is directed toward education, where the need is obvious – roughly 18 percent of it would go to public schools, 21 percent to higher education, 3 percent for early learning and other programs. But that still leaves more than $1 billion in new non-education spending, and that’s about how much of a deficit these proposals are forecast to leave for the 2009-2011 biennium.
“We’re trying to buy everything at once, rather than doing things over time,” Zarelli said. “The housing market has carried us. It’s safe to say that’s not going to continue.”
What happens then? Gov. Chris Gregoire has said she’s banking on continued growth in exports from our state to keep stoking the revenue picture. Her optimism has some merit, but it’s clearly a gamble. If revenues don’t keep growing at a fast pace, Zarelli notes, lawmakers will have to make painful cuts, increase taxes, or, most likely, both.
The gamble will be taken, Zarelli concedes. At least, though, the governor and Senate Democrats should follow through with their commitment to a constitutionally protected rainy-day fund, and add the roughly $365 million in unanticipated revenue and savings to it. Such an account is needed to help even out the historical ups and downs of state budgeting, which no amount of foreign trade will eliminate completely. House Democrats left it out of their plan; Senate leaders and ghe governor must insist upon it in final negotiations, giving voters a chance to approve it in November.
Gambling on continued prosperity is risky enough. Failing to set aside a substantial amount of money during boom times, and protecting it for truly tough times, would be reckless.