Commentary: Taxpayer group reacts to Senate budget


Jason Mercier, Budget Research Analyst
Evergreen Freedom Foundation

Olympia, WA - We've heard what the Democrats think of the budget proposed today by Senate Republicans and we know what the budget-writers have to say about their own work . . . so what about taxpayers? As a taxpayer watchdog organization, here's our take.

The 2003-05 budget introduced by Senate Republicans is a significant step in the right direction and an improvement over the governor's budget. Technically, it's balanced, even though it spends $353 million more than the state expects to collect in the next budget cycle. While there is always cause for concern when spending outpaces revenue (after all, that's what got us into the current mess), they have managed to avoid some of the more infamous budget gimmicks of last session, such as selling future tobacco revenues. (Lawsuits have gotten a little carried away and Phillip Morris is now facing the possibility of bankruptcy.)

While the budget is not balanced within forecasted revenue, the Republican budget team was able to take advantage of the forecasted increase in revenue for the next budget cycle ($1.3 billion or six percent) to avoid tax increases. This is good news for taxpayers and businesses already struggling to make ends meet in a state facing the third highest unemployment rate in the nation (6.8 percent).

Budget-writers also took steps to implement Governor Locke's new Priorities of Government (POG) budget model and base their plan on priorities, rather than routinely increasing spending to match new caseloads and inflation. The result is more of a "POG-lite," but it is a good effort given the time frame available.

By freezing the planned cost-of-living raises for most teachers and state employees, the Senate budget saves nearly $1 billion. Teachers are not left out in the cold by the proposal: Nearly 32 percent of those with up to seven years of experience will see salary increases on top of their automatic experience-based increases.

The Senate budget finds additional savings by allowing competitive bidding for some state services and tightening eligibility requirements for families requesting medical coverage for children. The new eligible income level for the medical coverage will be 175 percent of the federal poverty level, which is still the highest rate in the Northwest.

On a less positive note, the Senate proposal includes such expenditures as $45,000 to promote wildlife viewing. This is clearly not a core function of government. (Did someone's vote cost $45,000?) The plan also eliminates the state's emergency reserves. It allows a cushion of only $252 million for any potential caseload increases or inflationary costs over the next two years. Lawmakers may squeak by with this for one session, but it will not work for two.

There are two important things legislators should do if the Senate proposal is adopted. The first is to commit themselves to determining the state's core functions and prioritizing activities accordingly. The second is to adopt and implement true, independent and comprehensive performance audits.

The Senate proposal makes it clear the state budget can be balanced without new taxes. Democrats in the House should keep this in mind as they wrangle over their spending plan.

2003-05 Senate General Fund Balance Sheet
(Dollars in Millions)

Beginning fund balance $280.2
I-728 diversion reduction $188.2
Transfers from other funds* $157.5
Revenue increase measures $90.0
Budget driven revenue $5.9
Tax reduction measures <116.3>
Forecasted revenue $22,451.5
Total revenue available $23,057.0
Total appropriations $22,805.2
Unrestricted balance $251.8

*Includes remaining $57 million from emergency reserve fund

Contact Jason Mercier, Budget Research Analyst
(360) 956-3482


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