People of Northwest Public Radio
Wash. Budget Shortfall
Mon October 1, 2012
Reality Check: New Wash. Governor Faces $1B Shortfall, $1B Education Bill
Both candidates for Washington governor have pledged to drive more money into education – without raising taxes. But the state faces a $1 billion shortfall in the next two year budget cycle. Plus, a recent Supreme Court ruling requires the state to come up with another $1 billion for schools.
Balance the budget with no new taxes and fund education?
That’s the claim both Democrat Jay Inslee and Republican Rob McKenna are making, specifically at an August debate in Vancouver. But in Olympia, outgoing Democratic Gov. Chris Gregoire has been trying to call their bluff for months.
Last year the state Supreme Court ruled in what’s known as the McCleary case. It said that Washington is shortchanging education. Five months after the ruling, Gregoire said “We cannot meet our constitutional mandate on K-12 in the McCleary case, our moral mandate for early learning and our economic mandate for education if we are not going to look at new revenue.”
But Gregoire’s budget director Stan Marshburn cites a problem.
Marshburn: “Revenue is growing at about 4 percent a year. Our projected costs are growing at about 4.5 percent to 5 percent a year. That’s the structural deficit that we have to deal with.”
That explains Washington’s projected $1 billion shortfall. But factor in the K-12 bill coming due and Washington’s new governor will likely confront a $2 billion problem next January.
Republican McKenna says the way he’d deal with this would be to cap the growth of all non-educational spending at three percent a year.
“My point is that until we decide we’re going to restrain the amount of growth, not let it grow as fast, we’re not going to solve the problem for education,” McKenna said at a roundtable meeting with reporters in July.
He handed out color-coded spreadsheets and, as he often does, railed against the growth in health care spending in Washington.
But is it realistic to think the state can cap the growth in health care spending at something close to 3 percent? Democratic House budget chair Ross Hunter calls it a “wish.”
Hunter: “Actually what you have is a wish sandwich. You know when you got two slices of bread and you wish you had some meat?”
Both McKenna and Inslee say their ultimate goal is to implement a whole new system of paying doctors, based on healthy outcomes. But change like that takes time.
Rep. Hunter is just as skeptical of a budget balancing strategy his fellow Democrat Jay Inslee often touts on the campaign trail: LEAN management.
“There is no reason on this green Earth that we have not embraced the efficiency measures in state government that have been so successful in private enterprise,” Inslee said.
In truth, Gov. Gregoire has already begun to introduce LEAN initiatives to state government. But budget chair Hunter says LEAN is not a path to quick budget savings.
Hunter: “Not in the short run. In fact most LEAN stuff costs you money in the short run because you have to spin up employee groups, there’s training you have to do. You start getting savings three years out and that’s a good thing, absolutely, we should be doing it.”
But Hunter says it’s not going to solve a $2 billion problem come January. For that, he says new revenue may have to be part of the solution.
Hunter’s Republican counterpart on the House budget committee disagrees.
“I say, no, it can be done without new revenues. And I’m listening to both our governor candidates, they’re saying the same thing.”
That said, Rep. Gary Alexander agrees with Hunter: they can’t wring $2 billion in efficiencies out of the next two-year budget. Getting that kind of savings, Alexander says, will require more cuts to services.
Copyright 2012 Northwest News Network