Last week’s revenue forecast indicated revenues would come in about $16 million short of projections. That’s only a slight decline compared with misses in recent years, but state budget director Marty Brown called it “not all that positive.”
It certainly isn’t the encouraging trend being reported elsewhere. Thirty-one other states say they collected more revenue than projected.
The tepid Washington forecast should give caution to the promises of Republican Rob McKenna and Democrat Jay Inslee. Both have said they can meet the state’s obligation to fully fund basic education without raising taxes.
Inslee says he can find the estimated $1 billion through reduced health care costs, greater state efficiencies and a growing economy. McKenna simply says he can find the billion because it’s only about 3 percent of the general fund budget.
Whether or not the Republican and Democratic candidates for governor can fulfill that campaign promise may rest partly in the hands of outgoing Gov. Chris Gregoire.
The governor begins negotiations with state employee unions in about 10 days and, by law, must have it completed by Oct. 1. That means a new Gov. McKenna or Gov. Inslee will have to live with terms agreed to by Gregoire.
Brown, director of the Office of Financial Management, signaled recently that the governor would not be proposing salary increases and that he would be “very surprised” if cost-of-living increases were also on the table. He also noted that the collective bargaining agreement would “have to look at health care costs.”
State workers used to pay 12 percent of their health benefits. The governor asked them to pay 26 percent last time, and the two sides settled on 15 percent. Brown’s comments indicate the governor will again be asking employees to pay more.
Gregoire has said any new money will go into K-12 education, and presumably the two candidates to replace her are of like mind. Other states with increasing revenue aren’t even going that far.
At least 21 of the 31 states showing positive revenue trends say they are putting some portion of their surpluses into rainy day funds, rather than restoring previous spending cuts to health care, education and social services. They cite an uncertain economy and the expected growth of maintenance-level spending.
The state budget shouldn’t be balanced on the backs of state workers, but certain realities are hard to ignore. It may come to choosing between reductions in compensation or reductions in workforce. Cutting jobs only further slows our recovery, especially in the South Sound where state workers remain the major economic driver.
