Getting people back to work is the solution to our state’s budget crisis
There were no surprises when the quarterly state revenue forecast was released March 17. It showed incoming revenues are down by more than $778 million, putting the state's projected budget shortfall for the 2011-13 cycle at more than $5.1 billion. Lawmakers will have some difficult decisions to make in just a short time before the scheduled end of the 2011 legislative session on April 24.
Why do state revenues continue to fall?
Simple. More than 317,000 Washingtonians are looking for work. That doesn't include the thousands who have been out of work so long they no longer qualify for unemployment benefits and have given up seeking a job.
Many workers have found their hours cut or pay decreased. Uncertainty in the economy has many families prioritizing their spending for their most basic needs and foregoing their wants. It's why voters in November rejected tax increases and an income tax proposal, and reinstated an initiative to make it harder for the Legislature to raise taxes. People are tapped out. They can't afford higher taxes. And employers – they are just trying to keep their doors open and hoping not to issue more layoff notices.
That's the reality of our state's economy.
It doesn't have to be this way. There are things the state Legislature can do to get Washington working again.
First, we need to get state government off employers' backs so they can again create wealth. Small businesses did not lead us into this down economy, but they will lead us out. State government needs to be a part of their solutions, not their problems.
We took the first step by passing Senate Bill 5135 ,that provided employers a much-needed reduction of unemployment insurance rates this year. We also passed House Bill 1091, which provides a more stable and long-term fix by recalculating the unemployment insurance tax rates for employers. Both measures were signed into law.
But we need to go further.
In January, employer premiums for the state-run workers' compensation system increased by more than 12 percent. Negotiations are now underway to reform workers' comp – another key component to reduce employers' costs.
Senate Bill 5566 would enact an early-return-to-work incentive with a limited wage subsidy to encourage employers to provide light duty or transitional work. It also would establish a voluntary lump-sum settlement option for injured workers, something that 44 states already have. This legislation would ensure the workers' compensation system stays solvent and provides more stability against rate increases – something employers desperately need right now.
The measure passed the Senate and is being considered in the House.
We also need to pass a budget without any tax and fee increases. Voters were clear with their message in November. NO new taxes or fees! Yet, more than 85 bills have been introduced in the House that would increase taxes and fees by more than $900 million, including a tax on fertilizers, pesticides and petroleum products. That hurts jobs.
When people are working in a more certain economy, they will once again begin to spend. The taxes collected from that spending will help to boost state revenues to pay for vital state services, such as education, public safety and helping the state's most vulnerable citizens.
If we are to avoid future dives in state revenue, we need to get Washington working again. That's the solution to our state's budget crisis.
EDITOR'S NOTE: Rep. Dan Kristiansen, R-Snohomish, serves as chairman of the Washington House Republican Caucus and represents the 39th Legislative District. He can be contacted at (360) 786-7967 or e-mail him through his Web site at: houserepublicans.wa.gov/Kristiansen. His office address is: P.O. Box 40600, Olympia, WA 98504-0600.