Opinion
McKenna's Muddled Math
At Attorney General Rob McKenna's UW talk last night hosted by the College Republicans (the Young Democrats, who were invited to listen in and ask questions, were also on hand), McKenna hit a provocative and contrarian talking point that I'm hearing more and more from conservatives. Making the standard pitch that state government has grown under Democratic Gov. Chris Gregoire's watch (it's actually remained pretty static
when you adjust for inflation), McKenna said state revenues have actually increased over the last biennium by $4 billion. Government is expanding too much, he warned.
With all the grim news about a $5 billion shortfall, that line may have some people scratching their heads. Haven't revenues actually tanked?
Here's the deal: In the 2009-2011 biennium, the state took in about $28.5 billion (and had about $4 billion more in federal Medicaid matches—meaning the budget equaled about a $33 billion spend.) Thanks to inflation, population growth, and increased needs because of the recession, it would cost about $38 billion in 2011-13 dollars to maintain the same level of services (law enforcement, prisons, social programs, an education).
However, we've only got about $33 billion in revenues to cover those demands. There's the $5 billion shortfall.
McKenna's $4 billion number is the difference between the $28.5 billion and the $33 billion. That 13 percent revenue growth (the fed money doesn't count as revenue) is pretty normal. In the last pre-recession biennium, the '05-07 biennium, revenues grew 17 percent over the '03-05 biennium.
[pullquote]McKenna, in fact, seems to want to have his cake and eat it too. He told the students last night that the 13 percent growth was a good sign and that he was counting on that kind of growth to invest in health care and education.[/pullquote]
But after the Great Recession hit, we saw unprecedented dives: In '07-09, revenue grew by just .1 percent and in '09-11, revenues grew by .57 percent. So, the 13 percent growth in the next biennium shows that we're heading out of the recession, back to our traditional economic expansion. And tacking to that expansion—more people and jobs and inflation on long-term investment—the state's expenses go up.
However, McKenna seems to want to have his cake and eat it too. He told the students last night that the 13 percent growth was a good sign and that he was counting on that kind of growth to invest in health care and education. "We'll be able to increase funding for higher education through revenue growth," he said when pressed by students to explain how his plan, which otherwise seemed to rely solely on reducing the number of state employees without any tweak to the tax structure, was going to pay for services.
"We've had the most healthy growth in two years," he said of the revenue increase. "The budget is going to grow, revenue growth will be robust, and we'll be able to invest in education, getting back up to the 16 percent levels." (Traditionally about 16 percent of the state's general fund pie went to higher education; today it's at about nine percent. )
But wait. Isn't the $4 billion in revenues, the 13 percent growth, a sign of irresponsible government run amok?
We have a call out to McKenna for an explanation of this seeming discrepancy.
With all the grim news about a $5 billion shortfall, that line may have some people scratching their heads. Haven't revenues actually tanked?
Here's the deal: In the 2009-2011 biennium, the state took in about $28.5 billion (and had about $4 billion more in federal Medicaid matches—meaning the budget equaled about a $33 billion spend.) Thanks to inflation, population growth, and increased needs because of the recession, it would cost about $38 billion in 2011-13 dollars to maintain the same level of services (law enforcement, prisons, social programs, an education).
However, we've only got about $33 billion in revenues to cover those demands. There's the $5 billion shortfall.
McKenna's $4 billion number is the difference between the $28.5 billion and the $33 billion. That 13 percent revenue growth (the fed money doesn't count as revenue) is pretty normal. In the last pre-recession biennium, the '05-07 biennium, revenues grew 17 percent over the '03-05 biennium.
[pullquote]McKenna, in fact, seems to want to have his cake and eat it too. He told the students last night that the 13 percent growth was a good sign and that he was counting on that kind of growth to invest in health care and education.[/pullquote]
But after the Great Recession hit, we saw unprecedented dives: In '07-09, revenue grew by just .1 percent and in '09-11, revenues grew by .57 percent. So, the 13 percent growth in the next biennium shows that we're heading out of the recession, back to our traditional economic expansion. And tacking to that expansion—more people and jobs and inflation on long-term investment—the state's expenses go up.
However, McKenna seems to want to have his cake and eat it too. He told the students last night that the 13 percent growth was a good sign and that he was counting on that kind of growth to invest in health care and education. "We'll be able to increase funding for higher education through revenue growth," he said when pressed by students to explain how his plan, which otherwise seemed to rely solely on reducing the number of state employees without any tweak to the tax structure, was going to pay for services.
"We've had the most healthy growth in two years," he said of the revenue increase. "The budget is going to grow, revenue growth will be robust, and we'll be able to invest in education, getting back up to the 16 percent levels." (Traditionally about 16 percent of the state's general fund pie went to higher education; today it's at about nine percent. )
But wait. Isn't the $4 billion in revenues, the 13 percent growth, a sign of irresponsible government run amok?
We have a call out to McKenna for an explanation of this seeming discrepancy.
