OPINION EDITORIAL

March 26, 2004

The new meaning of "emergency"

Bob Williams | President | Evergreen Freedom Foundation
It used to be supplemental state budgets were reserved for times of emergency, when unforeseen circumstances created immediate needs mid-way through a two-year budget cycle.

Well, no more. These days, legislators are in the habit of coming to Olympia regularly and spending money every time they do. Writing a supplemental budget has become a routine part of the “off-year.”

This year was no exception. Before heading home, lawmakers approved a supplemental operating budget that will increase state spending by $145 million. This may not sound like much, but the state was already on track to spend $184 million more than it will collect this biennium, and economists warned legislators before session began that they would face significant deficits if they didn’t learn to live within their means.

Combined with last year’s overspending and $87 million worth of tax incentives passed this session, the state will now spend $416 million more in this two-year budget cycle than it will collect. As a result, we will be facing a $1 - 2 billion deficit come July 1, 2005.

Is this deja vu? As the Evergreen Freedom Foundation discussed just two years ago when legislators were negotiating a supplemental budget, increasing spending or expanding programs in the second year of a budget cycle increases the revenue necessary to continue those programs in the next biennium. This is called a “bow-wave” effect.

The problem gets even worse when lawmakers use one-time money—such as emergency reserves or designated fund transfers—to finance their new purchases. Such was the case again this year, and the state’s reserves have now been drained to $298 million, a mere 1.3 percent of the state’s total budget. A repeat of the 2001 earthquake would eliminate this small reserve—and fast—which is why state budget experts recommend having at least five percent set aside at all times.

But perhaps the expenditures included in this year’s supplemental operating budget couldn’t be avoided. Perhaps they were emergency needs that couldn’t wait. For example, the provision to spend $250,000 to provide “family planning” services in Yakima County to a select group of people. Almost without exception, the individuals targeted by this new expenditure are illegal aliens, a fact confirmed by the Senate Ways and Means Committee. The provision is also loosely written, meaning the money could easily be directed to controversial organizations like Planned Parenthood.

Emergency? You be the judge.

In addition to the $146 million increase in the state’s operating budget, legislators passed a $218 million supplemental capital budget to address what they apparently consider emergency construction needs. Would you call these emergencies?

• $6 million (taken from federal unemployment funding) to build an Employment Resource Center for Boeing. This center may be used to train out-of-state and foreign workers who will manufacture parts of the 7E7 somewhere outside our state.
  
  
• $100,000 to provide $25,000 awards to four public elementary schools whose students saw the highest percentage increases on their WASL scores. Elementary school students get to determine how this taxpayer money will be spent on a capital project at their school or in their community.
  
  
• $350,000 to build a gym for the Boys and Girls Club in Lake Stevens.
  
  
• $100,000 to create a memorial to the late Willy O’Neil, Jr., an environmental and political activist in Washington state.

Is it possible such expenditures were so urgent they couldn’t wait until the regular budget session? Was it truly necessary to increase the state’s debt to fund these capital projects?

Perhaps the most important question is: What happened to priority-based budgeting? Just last year Governor Locke earned national acclaim for his innovative new “Priorities of Government” budget model. This common sense approach requires the state to identify and define its most important tasks—what you might call its “core functions.” Programs and activities are then prioritized based on how effectively they help achieve these core functions, and the highest priorities are funded within available revenues. This guarantees more responsible spending within a balanced budget.

Unfortunately, the governor and legislators dropped the ball with this year’s supplemental spending increases. Adhering to the priority-based model would have required a revenue neutral budget, with new spending offset by reduced spending in lower priority areas.

Given the so-called “emergencies” above, is it really hard to imagine there might be a few less important activities that could have been put on hold instead of spending the state into a deeper hole? Rather than answer this question, it looks like legislators passed another “political” budget to boost their reelection campaigns come fall. Their slogan? “Bring home the pork now—figure out how to pay for it later.”

Bob Williams is president of the Olympia-based Evergreen Freedom Foundation, a policy research organization dedicated to restoring and advancing individual liberty, free enterprise and accountable government.

Contact: Marsha Richards | Communications Director | 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