Hello Readers,
By law, the governor must submit a budget annually to the legislature. The state budget cycle goes from July 1, 2009 until June 30, 2011. Revenues are projected for this two year period and state agency budgets are made based on those forecasts.
When an economy turns recessionary, tax revenue is reduced as there is less economic activity to generate taxes. This has been the case during this biennium. An additional problem is that the tax revenue keeps coming in lower than the projections, which makes budgeting (and living within it) more difficult.
Gov. Gregoire proposed an "all cuts" budget last year to deal with an economy that was measurably worse than it is now. Even though there are signs of recovery, this has not yet shown up in hiring nor in tax receipts.
The current projection has the state spending $2.6 billion more than it will take in until June 2011. This put the governor in a position where she had to propose deeper cuts than last year to keep the state in balance. The state cannot have budget deficits, unlike the federal government. Here is the link to Gov. Gregoire's website announcing her budget: http://www.governor.wa.gov/news/news-view.asp?pressRelease=1391&newsType=1
The Office of Financial Management is the state agency tasked with handling the state's budget and finances, http://www.ofm.wa.gov/default.asp
The governor and some legislators have made noise that further cuts are "unacceptable" and that "new revenues" are needed. You can interpret this to mean that tax increases are on the table.
Attached is a document showing in detail the current budget for all state agencies and programs, the 2010 proposal and what the budget will be if passed. Numbers in parentheses are cuts to the current budget. "All Funds" indicates other non-general fund money that goes into those accounts, usually federal funds. The key number is "GF-State" or general fund-state dollars.
The two key areas that WTIA and our members take an interest in are K-12 and higher education. Because "basic education" is a constitutional requirement, there are fewer cuts to the K-12 budget. The governor proposes to slash an additional $159+ million there. Some of these cuts hit STEM related programs in the middle and high schools, as well as teacher recruitment for math and science; something that is badly needed.
Because higher education is not a "protected" part of the state budget, it gets nailed pretty hard to the tune of $349 million. There will be serious discussion of closing a university.
A big part of the problem was overspending when times were good. The state did not put away enough into savings and put into place too many programs, especially in health care, where future funding was unreliable or undedicated.
WTIA members highly value education and are willing to see the state spend more, but not without results. Same is true of higher education. However, it would not be prudent for the state to raise taxes or end useful tax credits without cutting programs, preferably those outside education, first. Plus, we need to see that the K-12 system is moving forward, particulary in STEM related areas, before new money is spent.
Most states are facing this same problem and most got there in the same way. What we do not want is to become like California, where public employee special interest groups hold too much sway over elected officials, stopping good government reforms from occurring and helping to prevent future budget problems.