State needs to get off perpetual budget roller coaster

What do the state budget and area football teams have in common? They share the need for fundamental changes to return to a winning formula.

Consider the fact that in 2008 the Seahawks, Huskies and Cougars lost a combined 35 games, out of 41 played. Their response? The Seahawks and Huskies are making major changes in their programs, while the Cougars are building on last year’s major restructuring.

Although tax revenues are currently projected to increase by 5 percent in the next budget cycle, lawmakers face a structural deficit of more than $5 billion. Like a losing football team, it’s time for Olympia to make major changes.

Lawmakers should use this opportunity to fundamentally rethink what the government does and how it delivers vital core services to the public.

The first step should be to refocus state spending on those core functions that only government can provide. This means getting the state out of commercial activities, like selling liquor, while stimulating the economy through competitively contracting out some public services.

The next step should be to change the structure of the state budget so Olympia can finally get off the boom-and-bust budget roller coaster. There are several proven, common-sense reforms that would put the state on the path toward a sustainable, performance-based budget.

To protect taxpayers, lawmakers should:

n Adopt a constitutional amendment to limit the growth of public spending to inflation and population growth. Reasonable budget limits similar to those of Initiative 601, but as part of the state Constitution, would protect taxpayers and bring greater discipline to public finances. This would build on the success of the constitutional rainy-day account adopted by voters in 2007.

n Adopt performance-based, Priorities of Government budgeting to slow the rate of spending increase and end the chronic sense of crisis in state finances. The Priorities of Government standard has proved successful in the past. The Legislature should use it as a permanent part of the budget process by requiring all budgets be adopted against a performance-based, prioritized matrix. This would insure tax money is spent on top priorities first.

n Place performance outcomes directly into the budget. To help improve budget accountability, high-level performance expectations should be placed directly in the budget, so state officials and citizens can quickly see whether performance goals have been met before a program’s spending is increased.

n Conduct a comprehensive statewide performance review. This review process would help optimize state spending by identifying state programs that are unnecessary, duplicative, wasteful or have fulfilled their purpose. The money saved could be devoted to high-priority programs that provide valuable services to the public.

n Adopt a 72-hour budget timeout. To help facilitate public involvement, legislators should adopt a 72-hour timeout period once a tax or spending bill is introduced or amended and before hearings or legislative votes occur. This would allow lawmakers and the public at least a three-day period to calmly consider the two-year budget, new taxes or new spending before hearings or final voting occurs.

n Require updated six-year budget forecasts be tied to quarterly revenue forecasts or adoption of new budgets. To help provide updated information throughout the year on the state’s fiscal outlook, an official updated six-year budget outlook should be issued each time the revenue forecast is released or a new appropriation bill is adopted.

n Require completed fiscal notes before bills can be acted on. State officials and the public should know the full impact of a spending proposal before any action is taken.

n Bills proposing increased spending should not receive hearings or votes until a completed fiscal note is available.

Unless lawmakers reform the way the budget is written, they will continue to put taxpayers a touchdown behind with less than five seconds to play. Rather than rely on a short-term Hail Mary pass to balance the budget, it is time for fundamental restructuring to position the budget and taxpayers for ongoing success.

Jason Mercier is director of the Center for Government Reform at Washington Policy Center, a non-partisan independent policy research organization in Seattle and Olympia. For more information contact WPC at 206-937-9691 or washingtonpolicy.org.