This Washington

Republicans Point Out Negative Impact of Budget Windfall

By Josh Feit May 4, 2011

The state got an unexpected $263 million in revenue yesterday. No, there wasn't a two-thirds vote to repeal bank loopholes or raise taxes. To the surprise of the state's department of revenue, 8,888 businesses took the state up on an amnesty offer to pay their outstanding taxes now, rather than taking the risk of fighting the judgments in court, or paying late taxes with interest over the next four years.

"We're getting the money all at once," says Mike Gowrylow, spokesman for the state Department of Revenue, who adds, "it was a surprise, but a pleasant surprise." The department had originally estimated it would get only $24 million in the deal.

The windfall actually totals $321 million, but about $57 million goes directly to local governments.

Gov. Gregoire has suggested using $150 million of the windfall to pay down scheduled school costs in this biennium rather than going with the budgeting trick she proposed in the supplemental emergency budget earlier this year (the emergency fix to deal with a shortfall in the last six months of the current biennium) when she moved the school pay period into July—the next biennium.

Using the money for the current biennium means the total state windfall for 2011-13 (during which legislators have proposed about $4.5 billion in cuts to deal with the $5 billion shortfall) will technically shrink, but it also frees up the same amount of money, $150 million, to cover costs in the next biennium.

From some, like GOP senate budget leader Sen. Joseph Zarelli (R-18, Ridgefield), the new money may be a curse in disguise. While Zarelli likes that the last-minute cash will make the state's short term goal of balancing the budget "more doable," there's still the second goal, he tells PubliCola: "short and long term reforms to how we budget [and] spend." Zarelli says the extra money could help them nail down the first goal which should help them get to the second goal, but there's a potential problem.

For the GOP, whose leaders have scoffed at last year's one-time stimulus money for masking larger problems (namely how the state spends money), the surprise cash could be more of the same.

Directing his comments at the liberal house (which has proposed less drastic cuts than the senate) Zarelli told the Everett Herald: “It helps us solve that money piece. This was never all about agreeing on how we spend money. It's also been about how we reform government. The senate has agreed on a small list of reforms that are critical and bipartisan that the house needs to consider in earnest.”

[pullquote]As for Zarelli's point, Murray said, "Yes, it is one-time money," but added: "He says it's a spending problem. I say it's a revenue problem."[/pullquote]

Sen. Zarelli hit this Republican theme at the very beginning of the session:
Sen. Zarelli echoed his colleagues’ call to look at the fundamentals. He said the debate should “not be ‘what do we buy and what don’t we buy?’ That’ll be defined by the majority party, and that’s their prerogative.” He said the real issue is how to make government work better.  “Do we eliminate the Basic Health Plan because we can’t afford it? Or do we reform it so it does what it’s meant to do?”

We also have a message in to the Democratic budget leaders, including house ways and means chair Rep. Ross Hunter (D-48, Medina) to get his response to Zarelli's point.

Regarding the windfall in general, senate ways and means chair Sen. Ed Murray (D-43, Capitol Hill) says the money "helps, but folks want to solve a hundred different issues."

As for Zarelli's point, Murray said, "Yes, it is one-time money," but added: "He says it's a spending problem. I say it's a revenue problem."
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