"Savings" for taxpayers?
Senate passes $108 million supplemental budget

State Senators who passed a supplemental budget on January 29 are congratulating themselves for "saving taxpayers $127 million." But while it is true the budget passed is $127 million less than the $235 million Governor Gary Locke had hoped to spend, it still increases state spending between now and June 30 by $108 million. If approved by the House and signed into law by the governor, it will raise the state deficit in this budget cycle to $1.4 billion.

While we applaud the Senate for acting quickly on Governor Locke's proposed supplemental budget and finding ways to reduce his planned spending, we hope legislators in the House will take more serious steps to immediately address the state's spending problem.

The state is currently on track to spend $1.3 billion more than it will collect in the 2001-03 biennium, which ends June 30. This deficit will increase if state officials use the supplemental budget to raise spending. Further, many of the programs receiving the increased spending are permanent, meaning the expense will still be here in the next budget cycle, but the money will not. This kind of budgeting is unsustainable and irresponsible.

Proposed State Spending
(dollars in millions)

Lawmakers who wrote the current budget managed to patch the hole for awhile (and avoid technical violations of the law requiring a balanced state budget) with one-time revenue gimmicks. These include selling future tobacco revenues, diverting funds from designated accounts, and reducing the state's emergency reserve fund. But the current spending level is unsustainable and the patch will blow off in the next budget cycle if legislators do not take action now to solve the problem.

Lawmakers took an important step recently by requiring the Health Care Authority to re-screen recipients of the state's Basic Health Plan benefits, which resulted in nearly 20,000 individuals being dropped from the program when they couldn't verify eligibility. They should continue moving forward by reviewing all state agencies and programs in light of Governor Locke's innovative new budget model, which bases spending on core governing functions and prioritizes services within existing revenues. Unfortunately, neither the governor nor most lawmakers seem interested in implementing this responsible model right now.

Oregon Governor Kulongiski seems to understand budgeting a little better: "It is not good policy, given where the revenue forecasts are, to be spending more money right now. This creates the potential for another fiscal crisis fairly soon."

Legislators need to take far more important steps than simply curtailing travel expenses, personal service contracts, and equipment and motor pool purchases. They should take a critical look at the core functions of government and answer some tough questions:

1. What are the core functions of government? (Use Governor Locke's identified functions as a starting point for the debate.)

2. Once a service is determined to be a core function, what level of government (state, county, local, etc.) should provide it?

3. How will legislators know when these core services are carried out successfully? (Identify measurable outcomes.)

4. What is the most effective way to provide core services with existing resources?

Legislators should also take serious steps to address waste in government that has been identified in numerous reports published by the state auditor and the Joint Legislative Audit and Review Committee. Using the above model will help them do this by requiring meaningful identification and review of the state's true priorities, and development of a budget within forecasted resources.

Citizens and businesses cannot afford a heavier tax burden, and it is the responsibility of state officials to make sure they can honestly tell taxpayers they are providing essential services as efficiently, effectively and economically as possible.

Prepared by Bob Williams, President and Senior Research Analyst (360) 956-3482

Evergreen Freedom Foundation P.O. Box 552, Olympia, WA 98507 Phone: (360) 956-3482, Fax: (360) 352-1874 Email: effwa@effwa.org