Dear Friends and Neighbors,
It’s day 90 of the scheduled 105-day legislative session. We have just over two weeks remaining before the Legislature adjourns, which will most likely be April 23, since the final scheduled day is Easter.
Earlier this week, both Democrats and Republicans in the House released their operating budget proposals. While both have similarities, there are also vast differences between the two. I favored the House Republican proposal because it would have provided greater support for K-12 education, public safety and the state’s most vulnerable population, while leaving a stronger reserve in case of a future drop in revenue or an unforeseen emergency. The Republican budget would also spend $543 million less than the Democratic proposal while providing $10 million more for increased security at state correctional facilities. Unfortunately, the Republican budget was voted down on a party-line vote Wednesday evening in the House Ways and Means Committee.
We are voting this afternoon on the House Democratic proposal.
In the meantime, it’s been a very interesting week at the state Capitol as groups have come to protest “cuts” in the House Democratic budget plan. On Wednesday, protesters slept on the floor overnight in the Capitol rotunda. Thursday, they stormed the House gallery and 15 were later arrested when they tried to push their way into the governor’s office. Yesterday, a large rally was held at noon in front of the Capitol. See the photo at right.
Many of these protesters think the state needs higher taxes so it can spend more. However, as I noted in my last e-mail, Washington doesn’t have a revenue problem. It has a spending problem. As promised, I am providing more details about our state’s revenue versus spending below. I invite you to read on for more legislative news.
It is an honor to serve you.
Washington has a SPENDING problem, not a REVENUE problem
Back in 2005, forecasted revenue was projected to be $1.7 billion higher than the previous biennium. Gov. Gregoire signed a budget that spent nearly a billion dollars more than the state was taking in – despite an increase of incoming revenue. She did that knowing full well that the Legislature was overspending. “I don’t like it. It’s not sustainable. It’s what’s wrong with the budget in the state of Washington,” said Gregoire.
Two years later, the state had a revenue increase of $4.7 billion over the previous biennium. Yet the Legislature passed and the governor signed a budget that spent all of that additional revenue, PLUS an another $1.3 billion. Once again, the Legislature spent more than the state took, despite a sizeable increase of incoming revenue.
In the 2009-11 budget approved two years ago, the Legislature spent $885 million dollars more than it took in.
Now fast forward to this year. During the March 17 revenue forecast, it was announced incoming revenues would be down by nearly $800 million. However, that’s $800 million less than the revenue increase projected in November. The real story is that Washington is expecting nearly 14 percent more revenue over the next two years than the previous two years.
So what about the so-called $5 billion shortfall for the 2011-13 biennium and the “cuts” that drew protesters to Olympia?
It comes down to definitions.
In Olympia, a “cut” is often a decrease of an expected increase. For example, the 2009-11 budget spent $31 billion. To continue the same rate of spending, budget writers say the new 2011-13 budget should be more than $36 billion. This also assumes spending of $2.3 billion in federal bailout money the state received two years ago. However, that was one-time money the state will not be receiving again.
Revenue for 2011-13 is forecasted at $32.6 billion. So the “shortfall” is the difference between what budget writers want to spend and the forecasted revenue.
The Democratic budget proposal for the 2011-13 biennium would spend $32.4 billion. This is still a spending INCREASE of more than a billion dollars over the original 2009-11 budget. Since this proposal doesn’t spend $36 billion as budget writers wanted, those would be the “cuts” you hear about. Keep in mind, the proposed Democratic budget would still spend $1 billion MORE than the previous biennium.
The bottom line: We don’t have a revenue problem in this state. We have a spending problem.
Even though the new budget proposal would increase spending, there are groups who want to spend even more tax money. Protesters at the state Capitol have been yelling “cut tax loopholes,” which is double speak for “increase taxes.”
The term “loopholes” makes many people think there’s a mistake in the system – like something that allows for ways to buck the system. That’s not the case. In Washington, we don’t have tax loopholes. We have tax incentives. The distinction between the two is important because our state’s tax incentives are no accident. They were enacted deliberately for the specific purpose of creating jobs.
For example, in the first 10 years after the Legislature adopted a tax incentive that exempted sales tax on manufacturing and equipment, it created 285,000 new jobs. Remove tax incentives and you take away jobs.
More than 317,000 people in Washington are out of work, including 6,500 hundred in the 39th District. We shouldn’t put more people out of work in a misguided attempt to increase government revenue. The best way to increase revenue to the state is by getting Washington working again.
We need to get government spending in line with today’s economic realities. Businesses and families have cut back. Few people have seen a 14 percent increase in their incomes. So when protesters say state government needs more of your hard-earned money when it’s expecting an additional $4 billion in revenue over the previous biennium, I say “nonsense!”
It’s time to change the status quo in Olympia. We need to reset and reform state government, adopt a balanced and SUSTAINABLE budget, and provide policies that will get Washington working again.
Telephone town hall brings 39th District citizens together to discuss issues
I want to thank all of you who participated earlier this week in my telephone town hall meeting. At one time, we had nearly 500 people on the line. I greatly appreciated your questions and wished I would have had more time to talk with everyone. I’ve been getting great feedback from those who participated. As always, I invite you to contact me any time with your questions, comments and suggestions.
During the hour, I asked two survey questions. Here are the results of those questions:
What issue is most important to you?
37%. Jobs and the economy
33% The state budget
4% Public safety
11% Health care
More than 317,000 people in February were unemployed and looking for work – including more than 6,400 in the 39th District. What should be the role of state government in getting Washington working again?
64% Reduce taxes and reform the state’s regulatory environment to make it easier for private-sector employers to hire again.
4% Increase government spending to add more state employees.
11% A combination of each.
21% Not sure, need more information.
Transportation project underway near Sedro-Woolley
The Washington State Department of Transportation (WSDOT) has e-mailed me to sa it has begun its spring road construction season. One of the projects getting underway is east of Sedro-Woolley on State Route 20. WSDOT is replacing an old culvert with a new bridge across Red Cabin Creek. The bridge will protect the highway from closures and damage due to flooding, improve fish passage and eliminate the need for annual maintenance of a culvert.
In your service,