Opinion
Further Cuts are Not an Option
As expected, today’s revenue forecast blew a hole in the 2011-2013 budget that was passed just four months ago. State revenue will be $1.4 billion lower than expected. Clearly our state is still reeling from the recession and recovery is sluggish. Slowing revenue means Washington state will not have enough resources to sustain our remaining investments that foster economic growth and future prosperity.
What to do? At the risk of sounding like a broken record, we need to take a balanced approach. One that weighs revenue increases against the cost of shortchanging priorities like our children’s education, which will ultimately hurt our ability to recruit and retain businesses, or like cutting back health care which will cost us more in the long run.[pullquote]So far, 90 percent of actions to deal with the economic effects of the recession have come through painful cuts to basic public services.[/pullquote]
When the legislature and the Governor passed the state budget in May, they projected a certain amount of revenue from tax collections and other sources. The funds didn’t materialize as anticipated. Construction is projected to be “flat to negative through 2012.” Consumer confidence is down which means that demand
for retail goods and services is also down. So our state doesn’t have the money it was counting on, and now needs to find it someplace else. But further cuts are not an option.
Since the recession began in 2008 more than $10 billion has been cut from the state budget resulting in:
• Persistently high unemployment due to layoffs in state and local government;
• Diminished quality of our future workforce due to less affordable higher
education; and
• Fewer people able to buy goods and services that would help the economy grow.
So far, 90 percent of actions to deal with the economic effects of the recession have come through painful cuts to basic public services.
As if that isn’t enough, Gov. Gregoire recently ordered state agencies to come up with another 10 percent in cuts. That’s another $1.7 billion on top of the billions we’ve already cut.
Federal recovery dollars have dried up and deficit reduction could mean big cuts for Medicaid, Medicare, Supplemental Nutritional Assistance Program (food stamps), and other programs that help keep people out of poverty.
Complicating matters is I-1053 which was approved by the voters last November. The initiative ties the hands of legislators by requiring a two-thirds majority to raise revenue or a vote of the people. This makes it easy for a small subset of legislators to block a balanced approach, and makes it almost certain that the
public will have a voice in how revenue is raised. Of course, Initiative 1053 is a significant hurdle, but should not be an excuse for inaction.
We have a choice and it is simple. We can layoff more teachers, nurses, and childcare workers. We can cut healthcare for children and adults. Or we can end tax breaks for out of state banks and other special interests.
It is time for all of us to realize we can’t afford unjustified tax breaks that don’t create jobs and hurt our economy. Let’s focus on preserving and creating jobs for those that are working to create a prosperous economy for Washington state.
Whenever the legislature convenes to consider the budget, jobs must be the number one priority. That can’t be accomplished by continuing an all cuts approach. The legislature can pass a referendum and let voters decide whether to end tax breaks or make deeper cuts to education and healthcare. They can and they should.
Today’s revenue forecast shows us that we can’t afford not to.
Remy Trupin is the Executive Director of the Washington State Budget & Policy Center, a local left-leaning economic policy think tank.
What to do? At the risk of sounding like a broken record, we need to take a balanced approach. One that weighs revenue increases against the cost of shortchanging priorities like our children’s education, which will ultimately hurt our ability to recruit and retain businesses, or like cutting back health care which will cost us more in the long run.[pullquote]So far, 90 percent of actions to deal with the economic effects of the recession have come through painful cuts to basic public services.[/pullquote]
When the legislature and the Governor passed the state budget in May, they projected a certain amount of revenue from tax collections and other sources. The funds didn’t materialize as anticipated. Construction is projected to be “flat to negative through 2012.” Consumer confidence is down which means that demand
for retail goods and services is also down. So our state doesn’t have the money it was counting on, and now needs to find it someplace else. But further cuts are not an option.
Since the recession began in 2008 more than $10 billion has been cut from the state budget resulting in:
• Persistently high unemployment due to layoffs in state and local government;
• Diminished quality of our future workforce due to less affordable higher
education; and
• Fewer people able to buy goods and services that would help the economy grow.
So far, 90 percent of actions to deal with the economic effects of the recession have come through painful cuts to basic public services.
As if that isn’t enough, Gov. Gregoire recently ordered state agencies to come up with another 10 percent in cuts. That’s another $1.7 billion on top of the billions we’ve already cut.
Federal recovery dollars have dried up and deficit reduction could mean big cuts for Medicaid, Medicare, Supplemental Nutritional Assistance Program (food stamps), and other programs that help keep people out of poverty.
Complicating matters is I-1053 which was approved by the voters last November. The initiative ties the hands of legislators by requiring a two-thirds majority to raise revenue or a vote of the people. This makes it easy for a small subset of legislators to block a balanced approach, and makes it almost certain that the
public will have a voice in how revenue is raised. Of course, Initiative 1053 is a significant hurdle, but should not be an excuse for inaction.
We have a choice and it is simple. We can layoff more teachers, nurses, and childcare workers. We can cut healthcare for children and adults. Or we can end tax breaks for out of state banks and other special interests.
It is time for all of us to realize we can’t afford unjustified tax breaks that don’t create jobs and hurt our economy. Let’s focus on preserving and creating jobs for those that are working to create a prosperous economy for Washington state.
Whenever the legislature convenes to consider the budget, jobs must be the number one priority. That can’t be accomplished by continuing an all cuts approach. The legislature can pass a referendum and let voters decide whether to end tax breaks or make deeper cuts to education and healthcare. They can and they should.
Today’s revenue forecast shows us that we can’t afford not to.
Remy Trupin is the Executive Director of the Washington State Budget & Policy Center, a local left-leaning economic policy think tank.
