Saturday, November 14, 2009

Joe Zarelli, "Washington lawmakers should meet soon to deal with state budget imbalance"

Special Session, or not to have a Special Session, that is this week's question. The economy has reached a bottom and the reality of the demand on public services, and reduced revenues, are realized.

Two weeks ago Washington State Senator Joe Zarelli pressed for a Special Session, writing in the Opinion pages of the Seattle Times:
The math is straightforward: Each dollar saved in January is equivalent to a cut of $1.50 in July. Put another way, $67 million in reductions effective in January will erase a $1.2 billion gap in 18 months, when the 2009-11 biennium ends; if lawmakers wait until July, the cuts must be 50 percent deeper, or $100 million per month.

If serving our most vulnerable citizens is truly important, acting early — preserving $33 million worth of services every single month — makes sense.
There's time for legislative leaders and budget writers to prepare a spending-reduction package to take effect Jan. 1. New state caseload and revenue forecasts are due Nov. 13 and 19, respectively, and assuming they don't significantly shrink the budget gap, Gov. Chris Gregoire or the Legislature itself can call a special session for early December. Legislators will be in Olympia already for committee meetings. It would cost no more to convene quickly, bring the cost-saving package forward and adopt it.
. . .
Trouble is, soon there will be nothing to force lawmakers to reduce spending, because this year's budget punt ran enough time off the clock to send I-960 off the field.

Under our constitution, it takes a two-thirds legislative vote to amend initiative-based laws enacted less than two years earlier. Initiative 960 took effect in December 2007, so when the Legislature convenes Jan. 11, the majority party can do what it could not in 2008 or 2009: toss I-960 and raise taxes all on its own. No vote by the people, no bipartisan support or "public conversation" required, just one late-night legislative roll call and those tax-hike protections vanish.

History says bet on it. In 2002 and 2005, the majority suspended limits on government taxation and spending created by the people, most recently to allow $500 million in tax increases.

Sen. Joseph Zarelli of Ridgefield is Republican leader on the Senate Ways and Means Committee and a member of the state Economic and Revenue Forecast Council.
From the Seattle Times, Op-Ed, Joe Zarelli, "Washington lawmakers should meet soon to deal with state budget imbalance"

His points are true, he may be right, but he is in the minority party. His influence is opinion based, he does not have the power to call a Special Session, the majority party does.
Posted in the yesterday was this report:
OLYMPIA, Wash. -- Higher costs for government services have driven the state's projected budget shortfall to about $2 billion, Gov. Chris Gregoire's budget office said Friday.

And that's not all: The deficit is likely to grow even larger next week, when state economists issue a new forecast of expected tax income for the current budget period, which runs through mid-2011.
. . .
House Ways and Means Chairwoman Kelli Linville, D-Bellingham, said the Legislature will have to be open to all options, including the elimination of some state services. The Legislature largely avoided those kind of cuts last session, instead opting for across-the-board reductions and one-time budget fixes.

"Now we're down to: Do we do the service, or do we not do it?" Linville said.

The Statehouse's minority Republicans still see room for savings through a major restructuring of how the state delivers services. The GOP also says the Legislature should make those moneysaving moves quickly, rather than spending money for months on programs that will eventually have to be cut.

"Timing is everything," said Senate GOP budget chief Joe Zarelli, R-Ridgefield.

Linville agreed with Zarelli's push for quick action, and said her colleagues in the House have spent the summer compiling lists of moneysaving ideas.

She and Zarelli also agreed that the majority may look first at closing some tax loopholes, rather than straight-ahead increases of the state's sales, business, or property taxes. By CURT WOODWARD, ASSOCIATED PRESS WRITER, Washington budget short about $2B through mid-2011

The next bit of news should show up on November 19th, when the revenue forecast comes out.

It is still unlikely that a Special Session happens, but not impossible. What should be clear is that the legislature is at work, and should be ready to go on cutting some things, and working to find ways for local governments some options.
Allowing King County, and Seattle, to extend existing hotel taxes would allow both governments to shift non-core costs off core revenue streams.
Let's hope.

Have a great day,
Mike Baker

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