Budget shortfall among nation's 'most severe'
Sun, 03/22/2009
Last week we received more devastating, albeit expected, news. Our national recession and our state’s rapidly increasing unemployment rate, now at 8.4 percent, the highest our state has faced since 1987, have significantly reduced our tax collections.
The state Economic and Revenue Forecast Council’s latest forecast projects our historic revenue shortfall to a daunting $9 billion — a quarter of our state’s budget. This figure represents the gap between our current budget commitments in education, health care, public safety and environmental protections and the revenues needed to support these commitments. This shortfall is higher than any witnessed in modern times and is among our nation’s most severe.
In fact, if we eliminated all state funding for our total state’s correctional system, our total higher education system, all the care for our seniors, and all the care for those with developmental disabilities — all those cuts combined would not bridge our shortfall.
We are well into our 105-day legislative session. The legislature has already passed, and the governor has signed, two “Early Action” and “Belt-Tightening” measures. Senate Bill 5460 and House Bill 1964 have reduced our gap by $719 million. No legislature has ever approved budget reductions as early as we did this session.
But, this is just the beginning of the process and a comparatively small piece of the solution.
To close the shortfall, we must write a budget that will force drastic cuts on programs that are very important to thousands across our state. These cuts will affect state employees, our most needy, our schools and the health of our children. It’s this bad, and this simple: Our revenue shortfall is putting the health and the safety of our citizens and risk.
The senate plans to release our budget proposal sometime this week, and the house will release its proposal shortly after that. The senate will introduce an all-cuts budget, but I will also work with leadership to present a revenue package that voters can pass or reject as they see fit.
It is true that we cannot tax our way out of this shortfall, but I do believe that if we cut our way out we will create greater and more expensive problems. The issues our state’s programs address do not disappear if the programs go away. When we cut people from programs that make basic health care affordable, those citizens do not get or stay healthy. Their ailments simply get more expensive because they then have no option but to visit an emergency room, whose exorbitant costs are spread over the premiums paid by those with health insurance. And if we reduce opportunities for our citizens to pursue their education, we further weaken our struggling economy.
Recent polling conducted by Stuart Elway suggests that people understand the severity of the state budget situation, and over half of voters are “open” to raising taxes to help us bridge our budget gap. As our economy has continued to weaken and tax revenues deteriorate, the support for new taxes has increased. By a margin of 2-to-1, Elway found those polled were willing to raise taxes rather than eliminate state programs in three areas: social services, public education and the basic health plan.
An increase in the cigarette tax was far and away the most popular tax increase. Unfortunately, the department of revenue estimates this increase would only generate $56.4 million. Sixty-four percent of those polled would approve a temporary 1-cent increase in the state sales tax. This could generate more than $1 billion over a two-year period.
While this is a large sum of money, it will in no way close our budget gap.
As we work to find solutions that balance our budget while hurting the fewest people, we must continue to work together — Democrats and Republicans, advocates and citizens, all levels of government – to help find solutions. With challenges come opportunities, and I will do everything I can to make sure the choices we are forced to make will not worsen our weakening economy.
Sen. Jeanne Kohl-Welles, (D-36th District) chairs the Washington State Senate Labor, Commerce and Consumer Protection Committee.