PRESS RELEASE

March 11, 2004

Supplemental budget pushes state spending $409 million past forecasted revenue

OLYMPIA – Legislators approved a $145 million spending increase in the state’s operating budget tonight. Including changes made in tax policy this session, the state will spend $409 million more than it expects to collect this biennium. This means the state will face a $1 billion (or more) deficit heading into the 2005-07 budget cycle.

Governor Locke’s Priorities of Government budget consultant, Peter Hutchinson of the Minnesota-based Public Strategies Group, warned last year that the state’s commitment to the new priority-based budget model would be tested by its approach to the supplemental budget this year. Adhering to the model would have required a revenue-neutral budget, with new spending offset by decreases in other areas.

State budget experts echoed these concerns in December when they predicted the state would face a $3.1 billion deficit or enjoy a $380 million surplus in 2009 depending on how legislators approached the budget.

Priority-based budgeting requires that lawmakers identify government’s core functions and prioritize all spending within forecasted revenue. Even before today’s supplemental budget increases were approved, the state was on track to spend more than forecasted revenue. The new spending will increase the deficit for the next biennium.

“This is clearly an election year budget,” said Bob Williams, EFF’s president. “Instead of addressing the relatively small deficit we had coming into the session, legislators made the deficit bigger and guaranteed trouble for taxpayers in 2005.”

2004 Supplemental Budget Balance Sheet (Dollars in Millions)*

*As of 3/10/04 8:28 p.m. Conference Report.

Contact: Jason Mercier | Budget 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