Washington Business Fall 2019 | Washington Business | Page 40

business backgrounder | taxation
A Stitch in Time
Six ideas for reforming the spending structure to keep budget
growth from unraveling the state’s coin purse.
Clay Hill
Despite having record revenue and a growing state economy, the Legislature approved $2.9 billion over
four years in new and higher taxes this year. Missing from the debate about which taxes to raise and how
high to raise them was any serious discussion about how to save money. With that in mind, AWB’s Clay
Hill offers insights on how lawmakers can reform the spending side of the state’s balance sheet.
At A Glance
New spending initiatives have sent
the state’s budget on a 44 percent
growth spurt in the last decade.
Bills to create new programs
or enhance existing programs
outnumbered bills to abolish
ineffective programs 1,000 to one.
Those that propose consolidation
or efficiency often don’t receive a
public hearing.
Citizens deserve smart spending.
Practices like reporting cost drivers
for each agency, studying the
effectiveness of current spending,
learning from the best practices of
other states, identifying the likely
impacts of lower spending levels,
establishing expiration dates on new
spending programs, and providing
bottom-up cost-benefit analysis
reports with each biennial budget
request are six ways the state can
ensure the proper stewardship of
taxpayer money.
40 association of washington business
State spending is on autopilot and
gaining altitude fast. The state
budget has grown at 44 percent,
adjusted for inflation, since the
Great Recession. Despite having
an economy growing faster than
— DHM Research, AWB Tax Survey, April 2019
almost all other states, and record
revenue, leadership from the
majority party in Olympia decided last session that revenue was inadequate to fund
priorities.
As a result, much of the debate among lawmakers in Olympia ends up being about
whether and how much to raise taxes. What’s not discussed nearly as often as it
should be is whether the programs and services that currently receive tax funding
are effective. This latter conversation is more aligned with the views of Washington
voters. In a recent poll, 33 percent said state government is doing too much, while only
14 percent said services should be expanded.
“In a recent poll, 33 percent said
state government is doing too much,
while only 14 percent said services
should be expanded.”