washington business
Lawmakers ignored pre-recession warnings that state spending
was outpacing revenue and would eventually lead to a crash.
Now, as they struggle to restore budget stability, AWB joins
with others in calling for a new approach to spending.
As legislators returned to Olympia to deal with yet another multi-billion dollar state budget shortfall, at least a few
of them must have wondered if it will ever end.
When will they stop dealing with one budget crisis after
another? When will the cuts be enough to stop the flow of
red ink? When will things return to normal?
The answer, unless they make some fundamental
changes about how they approach the budget, is not
anytime soon.
As it is now, everything could fall into place to balance
the budget — Democrats and Republicans could agree on
millions of dollars worth of budget cuts, and voters could
approve Gov. Chris Gregoire’s proposed half-cent sales tax
hike — and they would still find themselves facing budget
shortfalls for years to come.
“The long-term projection in the state budget basically
has to be dealt with, or else we will be in deficits every
single year for the next five years,” Sen. Jim Kastama,
D-Puyallup, said last year in a video posted to his website.
That’s because the collapse of the economy a few years
ago, although certainly a contributor to the state’s persistent budget problems, was not the only cause of them.
The other culprit was years of spending that outpaced
revenue. Even a surge in the economy wouldn’t necessarily bring an end to the pain.
Between 2003, when the
state had recovered from the
2001 recession, and 2008,
when the national
economy collapsed,
Wa s h i n g t o n ’ s
spending rose an
astonishing 33.6 percent, far outpacing combined inflation and population growth.
It was recipe for trouble, even if the country had not
fallen into the worst recession in generations. Combined
with the economic downturn, it was a disaster.
“What we’re really dealing with today is that extra
30-plus percent growth,” said Gary Chandler, AWB’s vice
president of government affairs.
spending more than you have
There were plenty of warning signs.
Long before the economy crashed, political observers
cautioned lawmakers in Olympia to reign in state spending.
The unprecedented rise in state tax revenue, fueled largely
by a real estate bubble and the accompanying constructionrelated revenue, would not go on forever, they said.
“Washington’s cyclical economy regularly produces
times of great revenue growth, followed inevitably by
the downturn,” AWB President Don Brunell wrote in a
Jan. 25, 2007 letter that urged the House Appropriations
Committee to control spending.
A few months later, Brunell co-authored a similar letter
to the state Senate:
“We say now, as we did when the governor released her
budget, the state cannot continue to spend more than it
takes in,” it stated. “Increasing spending 15 percent while
revenues grow 7.5 percent is not responsible.”
A little more than a year later, The News Tribune was
sounding the alarm.
“Watching the action in Olympia this year, I have the
sense that lawmakers aren’t just writing checks state
government can’t cash, they are post-dating them too,”
“The state cannot continue to spend
more than it takes in. Increasing spending 15 percent
while revenues grow 7.5 percent is not responsible.”
— From a January 2007 letter to lawmakers, co-authored by
AWB P