Thursday, January 3, 2013/lk
Though it likely won't look anything like the final end-product that passes the state legislature this spring, outgoing Gov. Chris Gregoire recently produced a budget proposal for the 2013-15 biennium in accordance with state statute.
"My goal with this budget was to give our incoming governor and the legislature a balanced and sustainable plan that addresses our fiscal problem and preserves services that are pivotal to our future prosperity," Gregoire says of what she calls a nearly $1 billion budget shortfall the state faces for 2013-15.
Rep. David Taylor (R-Moxee) is one of three representatives for the Lower Valley in the state legislature. He says the annual exercise of the governor submitting a preliminary budget basically is an effort to "begin the conversation" for setting the budget.
That's especially true in the case of a lame-duck governor like Gregoire, who will leave office in two weeks after serving two terms.
"It's important for people to keep in mind that we have a new governor coming in," says Rep. Bruce Chandler (R-Granger). "While it's a quirk of our constitution that the outgoing governor presents a budget, a new governor will have different priorities and I think we have to anticipate that."
Added Sen. Jim Honeyford (R-Sunnyside), "Thank you for your service Governor, but we will be writing our own budget. The new governor (Jay Inslee) has to get up to speed."
So how do three of the local impacts from Gregoire's proposed $34 billion general fund budget ($74.8 billion overall) stack up in the eyes of this area's state lawmakers?
All three lawmakers disagree with Gregoire's proposal to cut $100 million from levy equalization, a state program that directs more money to poorer school districts in areas with low property values.
The idea is to ensure equal education opportunities across the state, regardless of income and property values.
Levy equalization and education spending in general will be under the microscope in Olympia this session because of a state court mandate last year that requires lawmakers to provide more support for basic education as indicated in the state's constitution.
"Fund education first," says Chandler. He notes about 44 percent of the state's budget has been directed at K-12 education, and he says a process is in the works to up that to 47 percent.
"I believe our goal is to fund education first," added Honeyford. "I don't think there's any way you're going to cut levy equalization."
Taylor added that the move to again cut levy equalization represents an urban vs. rural divide in this state. He contends the best long-term approach to resolve education funding issues is for Washington to have land-use laws that are more business friendly.
"If you want school districts to receive funds through the property tax base, then you need to promote economic development," says Taylor. "That leads to higher property values. This isn't rocket science and it's an easy equation to figure out."
Gregoire's budget proposes a wholesale excise tax on gasoline and diesel fuel that would increase gradually over the next three biennia to eventually fund the entire K-12 school transportation budget.
"By using transportation taxes to fund pupil transportation, state general fund dollars will be freed up to cover other K-12 enhancements," Gregoire contends.
Further, she is proposing to extend for three-and-a-half years two temporary taxes that the legislature enacted in 2010 - a business and occupation surcharge on certain services and a beer tax surcharge.
"I was disappointed with her approach," Chandler said. "The voters by a 2-to-1 margin across the state rejected higher taxes as a way to move forward with the state budget and she seemed to turn a deaf ear to that."
He also chided the governor's proposal to take liquor tax revenue sharing away from cities.
"I think that we need to recognize the sacrifice that local governments have been making for several years," Chandler countered. "They are three to four years ahead of where the legislature is. Our school districts and city councils have been making actual reductions or re-prioritizing budgets far beyond what the legislature has been willing to do."
Added Taylor, "I am at this point unwilling to look at new revenues until we address the underlying problem of spending more money than we take in."
He noted that state revenues have already increased 7 percent in each of the past two bienniums.
"I generally don't support raising taxes," says Honeyford. "We're getting right at $2 billion more in revenues this biennium."
With that increased income already anticipated, Honeyford says the solution to the state's budget woes isn't more revenue, but instead taking a closer look at expenditures.
He says accountability and streamlining each state agency will go a long ways to avoiding the need for new taxes.
"We give funds to local governments to buy parks," Honeyford said of one example. "These are nice things but I wonder how long we can maintain those kinds of programs."
Honeyford noted the example of Brooks Memorial State Park in Klickitat County. He said instead of salvaging timber in the park that was destroyed in a fire more than a year ago, park officials waited to the point that the timber is now likely unmarketable.
That, says Honeyford, was a wasted opportunity for a state agency to gain needed revenues.
"Mismanagement like that frustrates me and others," he says. "It's an accountability issue."
All three lawmakers support Gregoire's proposal to spend $23.6 million from the capital budget to start work on a plan to meet the Yakima Valley's future water needs.
Called the Yakima River Basin Integrated Plan, the project is supported by state and local governments, as well as the Yakama Nation.
It's estimated the plan, which would begin with constructing a pipeline from Lake Keechelus to Lake Kachess and providing more water storage and improve fish habitat, will cost about $5 billion.
That overall price tag includes future proposals that would construct a new dam at Bumping Reservoir to increase capacity and an off-channel water storage facility at Wymer on Lmuma Creek.
While all three local lawmakers support the plan and state funding, they each have concerns.
"Is $20 million enough to get it started? I don't know," Honeyford said of Gregoire's proposal to fund the water plan's first steps. "My bigger concern is we're moving forward with proposed land purchases, which is what the environmental community wants. Are we taking more land off of the tax rolls early in the process to the point where we have nothing left to negotiate?"
Added Taylor, "If there's one thing we've seen, once it (property) goes off the tax rolls it's difficult to get it back on."
Chandler wants to make sure there's accountability and order in the funding and implementation of the basin plan.
"It's a beginning, but we need to appropriate funding for the integrated plan in a matter that people see value in the money that's being spent," he said. "You don't want to spend so little that you can't complete the plan, but you want to do it in a way that's affordable over time."
Chandler also echoed a call by U.S. Congressman Doc Hastings to make sure that as environmental work is done for the basin project, so too at the same time are steps for water storage.
"Conservation only gets you so far and we have to have new water available," he said.
With a new legislative session set to start in a matter of weeks, Chandler feels it's time for state lawmakers to turn a new page on how it writes the next budget.
"The main thing is Olympia needs to stop being convinced they can increase the amount of money they are spending without recognizing the consequences on the lives of working families."
He says the era of a robust state economy is still years away, a reality that his colleagues in the legislature need to embrace.
"The tendency in Olympia since 2008 has been that the economy will straighten out and everything will go back to the way it was," Chandler said. "I appreciate the optimism, but a growing number of us (legislators) are realizing this is a generational transition in our economy and can't assume tax revenues will go back to the way they were."
He added, "It's time for us to have a strategy that is truly sustainable and that sets clear priorities."
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