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COMMENTARY June 20, 2003 Contact: Jason Mercier, Budget
Research Analyst Revenue forecast dips into reserves Yesterday's state revenue forecast announced a $157 million drop in expected revenue for the 2001-2005 bienniums. Despite this bad news, projected revenue next biennium will still be increasing by $1.1 billion over this biennium. The $157 million drop leaves the state with only $118 million in reserves (this does not include the expected federal bailout). As a result of these changes, the recently approved 2003-05 budget spends $767 million more than forecasted revenue. Legislators hope to increase available revenue by $446 million through increased revenue collections, fees, and property tax diversions approved this past session (but not yet signed into law). Even if the anticipated revenue is fully realized, legislators will still be spending $321 million more than the state collects. Judging from the other news in yesterday's forecast, legislators were wise to stash away the federal bailout money for the state's reserves. Washington's chief economist, Dr. Chang Mook Sohn, doesn't foresee full economic recovery for the state until sometime in the second quarter of 2005. This fact, coupled with the Office of Financial Management's belief that a supplemental budget will be needed to account for caseload increases, means our state's reserve is likely to be raided again. Yesterday's economic news underscores the importance of continuing the prioritization of state services and reviewing agency efficiency through comprehensive, independent performance audits. June revenue forecast
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1 Part Honesty; 2 Parts Arrogance At a March 23, 2005, House Appropriations hearing on a bill to gut the voter-approved I-601 spending limit, Rep. Jim McIntire (D) asked a supporter of I-601’s two-third supermajority requirement for the legislature to raise taxes the following question: "Can you name a time when we [legislators] have actually not just set it [supermajority requirement] aside by majority vote? I mean, this is in many respects a procedural motion that has no bearing. It’s a statutory constraint that cannot constrain any legislature that chooses as a majority to set it aside . . . have we ever used a supermajority [to raise taxes]?" - Rep. Jim McIntire (D - 46) Despite the arrogance of some state officials, Washington's constitution is clear: "All political power is inherent in the people..." |
