How can Washington State legislators solve a $5.3 billion deficit?

by Bob Williams
Evergreen Freedom Foundation

Two years ago, the Freedom Foundation proposed 10 major ideas for tightening the state’s budget. In addition, we proposed one budget-saving idea for each of the 105 days in the 2009 legislative session. Some of these ideas were implemented, but most were ignored. We updated our “Top Ten Budget Ideas” and are also proposing a new idea for each day of the current legislative session.
The truth is, there is no shortage of ideas for fixing the budget. The demand for government services is virtually infinite, but the resources to pay for them are not. This is why legislators must do the job for which they were hired—prioritize the role of government within existing resources.
To show that it can be done, I have listed proposed reductions below totaling more than $6.5 billion, even before implementing efficiency measures or Governor Gregoire’s proposed elimination of the Basic Health Plan ($230 million General Fund savings) and the General Assistance Unemployable program ($327 million).
Some of these ideas might be more politically feasible than others, but the point is, it can be done.

Proposed savings for the 2011-13 Budget

$2.14 billion: Don’t replace one-time federal funds.
$1.5 to $1.9 billion: Implement contingency-based Recovery Audits. Average improper payment findings run 0.10% to 0.30%. That means for every $1 billion audited, $1 to $3 million in improper payments is usually found. Sometimes however, findings of improper payments may run as high as 2%. In the healthcare sector, audits may find 5% to 8% in improper payments. Therefore, for every $1 billion audited $50 to $80 million in improper payments will probably be found. Based on that, out of $23 billion in proposed healthcare spending for 2011-13 (DSHS, DOH, WA state health care authority), recovery audits could yield savings of 5 to 8%= $1.15 billion to $1.84 billion. An audit of remaining accounts could yield between $40 million and $117 million. 
$860 million: Suspend Student Achievement Program under Initiative 728. The initiative provides for smaller class sizes, extended learning time for students and professional development for teachers. The added spending was originally supposed to be paid for out of surplus funds.
$386 million: Eliminate automatic cost-of-living increases for retirees. This repeal would reduce public employer payments by an estimated $9 billion over the next 25 years.  For the next two years local governments, will save $353 million and the state will save $368 million.
$300 million: Privatize State Liquor Board warehouse.
$280 million: Suspend employee salary increases under Initiative 732 for K-12 and higher education teachers and other employees.
$216 million: Eliminate K-4 class-size reduction funds provided to school districts that exceed the state’s basic education allocation.
$206 million: Reopen state employee contracts and require state employees to pay 26% of their health care premiums.
$180 million: Implement State Auditor’s recommendations on purchasing K-12 health insurance.
$176 million: Reduction of 3 percent in compensation for state employees.  Saves $176 million in state funds, $269 million in all funds.
$100 million: Eliminate $5,000 bonus for teachers who teach in high priority schools. Less than 1 percent of the board certified teachers have switched to challenging schools.
$80 million: by eliminating step increases for state employees for next two years
$59 million: Stop paying for healthcare of children who are not here legally.
$55 million: Eliminate SEIU training program.
$10 million: Eliminate cash payouts for unused sick leave for state employees.