The state Legislature has turned its attention this week to its number one job before the scheduled March 12 adjournment: adopting a new supplemental state budget.
The Senate and House have passed separate versions of record-high budgets that include significant spending increases with no relief for taxpayers.
State Senator Steve O’Ban, R-Lakewood, the ranking member of the Senate’s Health and Long Term Care Committee, noted that the budgets contain some good ideas. For example, the Senate budget includes $24 million per biennia for skilled-nursing facilities; $100 million for a new behavioral-health hospital at the University of Washington; and $38 million for increased staffing at Western State Hospital.
The proposals, however, may come with longer-range risks. The state’s financial situation is healthy right now with steady revenue increases including healthy sales tax revenues generated by retailers and their customers. But, economies ebb and flow. Recession worries of the past year have receded but the state economy will inevitably slow down at some point.
That’s when it would be wise to have maintained or grown a budget surplus as a hedge during a recession. A surplus could help avoid future tax increases or deep cuts in public services. State Treasurer Duane Davidson agreed with a commentary he recently wrote in the Tri-City Herald.
The Senate’s $54 billion budget proposal includes a $1.1 billion spending increase the next two years, a 20% spending increase, the highest for the state in 30 years. It also spends the $2.4 billion budget surplus down to $0, leaving the state exposed with no financial cushion if the economy were to slow down, according to O’Ban. The House budget calls for a slightly higher spending increase of $1.2 billion.
Minority Republicans in both houses of the Legislature had suggested that the surplus could provide property tax relief or even relief from rising auto registration fees.
These proposals call for percentage spending increases of twice the rate of wage increases across the state, according to Senator O’Ban’s office. A compromise version of the House and Senate spending plans is very likely headed for approval in the coming days.
If nothing else, Senator O’Ban offers his colleagues a warning that they are not holding a blank check with the public’s money. Spending beyond its means sets a potentially dangerous precedent by the Legislature.