Budget writers in the Legislature heard it over and over again this year: Don’t cut my program; it saves money for the state in the long term.
But cuts tend to be made for the short-term. So scuffles over what really saves the state money have continued up to now, as Gov. Chris Gregoire prepares to sign the state budget into law Wednesday.
State Auditor Brian Sonntag wants Gregoire to veto the Legislature’s cut to his performance audits, the voter-created reports that he says have saved the state hundreds of millions of dollars.
Lawmakers slashed the fund, which has left money unspent in the past, by roughly a third. But what’s most objectionable to Sonntag is that the money goes to other agencies, helping the state find fraud in social services and unpaid taxes to recover.
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“It doesn’t take away from their work or the importance of their role, but you know, everybody got cut,” said Senate budget chairman Ed Murray, D-Seattle. “There are programs throughout state government that save us money. Cutting K-3 class size is one of the best investments the state can make. You save the state and you save the human service system incredible amounts of money.”
And budget writers eliminated more than $1 billion in class-shrinking money for the early grades. Those are the kinds of cuts Murray most regrets, not the audit transfers or suspension of the state Productivity Board, another state-government reform function.
The board collects money-saving ideas from state employees, who take a cut if the efficiencies pan out.
Its chairman, Republican Secretary of State Sam Reed, says that for every dollar spent the board has saved the state $9.48.
“Of all times to not be providing incentive for employees to come up with money-saving ideas, this just seems to be the worst time possible,” Reed said.
Another efficiency board, the Joint Legislative Audit and Review Committee, chaired by Tacoma Rep. Troy Kelley, will have to scale back a bit. It will perform four fewer audits this year under reduced spending levels, according to legislative staff.
But the biggest cut in oversight comes from the performance audits created by voters in 2005 when they approved Tim Eyman-backed Initiative 900.
The measure set aside nearly a sixth of a penny of each state sales-tax dollar to allow the auditor to come up with ideas for reforming government. That’s a more sweeping mission than Sonntag’s daily duties of looking into public agencies’ finances and investigating whistleblower complaints.
The result, Sonntag reported in December 2009: about $285 million in potential government savings identified to date. More than three-quarters of it, he said then, had been acted upon by state or local governments.
Sonntag has had more to tout since then: In that same month, he issued a performance audit suggesting the state might want to look into granting amnesty to delinquent taxpayers who pay up, something the report said had been done in 16 states in the prior two years alone.
The Legislature a year later offered businesses a one-time amnesty between Feb. 1 and April 30. Thousands of businesses rushed to take advantage, far more than expected – providing a windfall for state revenue collections that helped bridge the budget divide between the Senate and House.
It raised $282 million for state government alone, Sonntag says.
Murray says Sonntag isn’t the one responsible for those savings. It’s done across the country, he said, and the Gregoire administration drove it here.
Sonntag’s reports have stirred up plenty of opposition, especially among state employee unions adamantly opposed to some of the options he has laid out for privatizing their jobs – from liquor sales to the state printer – or overhauling their health benefits.
“I don’t think it’s a secret that some folks, primarily the majority party, has not been particularly happy with Brian looking into what’s going on in various agencies,” said Republican Sen. Mike Carrell of Lakewood.
VETO THREATENS FRAUD-FIGHTING
Nearly $30 million is expected to flow into Sonntag’s performance audits account in the next two years. But the Legislature required that just under $10 million be either used for other purposes within his office or be transferred.
Cuts are nothing new. Lawmakers swept $17 million from the fund in 2009 and 2010.
And even after that, there will be more than $4 million unused in the fund when the budget year ends.
Sonntag maintains that such a large cut means there will be “some things we can’t go look at,” but he’s less opposed to the cut itself than the precedent it sets.
Lawmakers are diverting the audit money to help other agencies: the Department of Social and Health Services and the Department of Revenue. The state auditor is supposed to be independent from the agencies he monitors, Sonntag said.
The cut “really calls into question how independent we appear,” he said.
Gregoire’s office isn’t saying if she’ll veto the transfer, but a veto would raise difficulties in other agencies.
She can veto it but can’t move money around within the budget, leaving no way to pay for investigations into fraud in social programs such as welfare and child support.
Not only would a veto eliminate the money for the fraud unit to expand, according to Gregoire’s budget office, but there would be nothing left to pay for the investigators who are already on the job.
Carrell and other lawmakers deplored the shrinking number of welfare-fraud investigators and successfully pushed to bulk up the office.
But Carrell, who voted against the budget, said Monday he had no idea it found so much money for the fraud unit by digging into performance audits. The transfer originated in the bipartisan budget plan drawn up by Senate Democrats and Republicans in April.