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Dear Friends,

I wanted to take a few moments to provide an update from the Legislature and to discuss concerns with the state budget. The state's quarterly revenue forecast was released Sept. 15. You can read the report here. The state's chief economist, Dr. Arun Raha, said consumer confidence remains at an all-time low. As a result, people are not spending money. What that means is that the state is expected to take in $1.4 billion less than was projected during the revenue forecast in June.

In May, the Legislature adopted a two-year budget that spends $32.2 billion. I voted “no” because I felt it spends too much money and doesn't recognize the economic realities of our state. When the governor signed the budget into law in June, a paltry $163 million remained in savings. The Legislature appropriated the rest for spending. This newest revenue forecast not only wipes out that savings account, but now places the state budget into a $1.27 billion shortfall – confirming my concerns when I voted against this spending plan.

Last Thursday, the governor said she is calling the Legislature into special session on Nov. 28 to address this budget crisis. She chose that date because it comes after the Nov. 17 revenue forecast when the Legislature will have better numbers to deal with. Some expect by that time, the state will be facing a budget shortfall exceeding $2 billion.

I want to make it very clear here that the problem is NOT with incoming revenues. Incoming revenues are UP over last year. The problem is that the Legislature continues to spend even MORE.

 

Some have suggested tax increases to address the state's budget problem. (See that story here.) That's a terrible idea, say most economists, who believe tax increases could push Washington into a deeper recession. Look at the chart again. The bottom line is this:  WE NEED TO STOP SPENDING MONEY WE DON'T HAVE!

Families and employers have both adjusted to the realities of the session and have cut back spending. The Legislature needs to do the same.

I agree with the governor's decision to call a special session, because every day that is deferred from reducing spending puts the state into a deeper hole. However, we need to have budget writers working NOW to provide a plan to re-adjust spending so that when lawmakers arrive in Olympia on Nov. 28 they can take immediate action. That means setting priorities of spending in the budget. In my view, we need to first fund public safety, education, and protection of the state's most vulnerable population.

Instead of raising taxes we should:
1. Eliminate programs such as bonuses for state employees who carpool.

2. Not allow EBT cards to be misused for strippers, alcohol, and the like, and require proof of continuing residency for welfare and food stamps, which would return almost $300 million to state coffers.

3. Restructure the Department of Social and Health Services and eliminate many positions in mid- and upper-level management, which would save according to some estimates more than $500 million.

4. Prevent state government from further increasing costs against employers (such as proposed workers compensation rate increases) that take away their resources to hire  and grow the economy.

Here's the other reality: We can cut and patch the state budget all we want, but it won't fix the problem. Ultimately, the solution to our budget crisis is to Get Washington Working Again. House Republicans have an eight-point plan that would relax the financial and regulatory burdens of state government that stand in the way of private business job creation. Click here to read this plan.

Uncertainty is reduced when people are steadily employed. When people are working, they will once again begin spending money, which in turn will provide the tax revenue to support services in the state budget. Job creation in the private sector is where our focus should be – both in the special session and when the Legislature convenes in regular session Jan. 9.

As always, I welcome your comments and ideas.

Sincerely,

Matt Shea

State Representative Matt Shea, 4th Legislative District
RepresentativeMattShea.com
427A Legislative Building | P.O. Box 40600 | Olympia, WA 98504-0600
matt.shea@leg.wa.gov
(360) 786-7984 | Toll-free: (800) 562-6000