Washington has three state budgets: Operating, Transportation and Capital Construction. The Operating Budget is the largest, accounting for about $55 billion every standard two-year budget cycle. The Transportation and Capital Construction are much smaller. Combined, they account for less than half the Operating Budget.
Right now, Olympia faces budget issues that it hasn’t faced since the 2008 “Great Recession.” As I’ve said previously, the state is facing a “cash deficiency” and overall budget shortfall because of the current Governor’s actions. His “lockdown” proclamations have pushed Washington’s economy into crisis.
As a result, we must trim state spending. Trim the state budgets. And these adjustments don’t have to be drastic—we can adjust to lower current tax receipts by trimming back to 2017 or 2016 spending levels.
Our state government was able to deliver basic education and essential services effectively at 2016 and 2017 levels. We should be able to maintain those core operations of government while returning to those recent spending levels.
Under state law, the current Governor has a few crude budget tools to respond to the economic downturn he’s created. One of those crude tools is implementing across-the-board budget cuts to state agencies. While this may sound like a simple solution, it’s really not the best way to trim our budget sails.
The best way to trim budgets is to use what policymakers call “programmatic” adjustments. This is the opposite of across-the-board cuts.
Programmatic adjustments require the legislature—which, right now in the Fall of 2020, would need to be called into special session—to do hard work. Legislative budget writers review thousands of programs and projects, line by line, and make informed decisions about ranking each by importance. Then, those budget writers need to make another set of informed decisions about how much money (the technical term is “allotments”) to trim. Generally, they start from the bottom of the priority list and work up.
This strategy works. It worked recently, when the state’s Transportation Budget had to be adjusted by some $450 million to match the expected tax receipt drop, resulting from $30 car tabs initiative. Even though that initiative hasn’t taken effect yet, the legislative budget writers were able to make the necessary adjustments without cutting essential Transportation services.
We need to do the same thing with the Operating Budget. It’s much bigger and will require more hard work. But that’s the work Olympia should be doing. Not just calling press conferences!
The current Governor should have called the legislature into special session months ago—to focus on necessary budget adjustments. By playing politics and refusing to work with the legislature, he’s making the state’s “cash deficiency” problem worse. This is a shameful failure to solve our budget issues.