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Friday, December 11, 2009

In the 2010 legislative session, Washington State will have to address the continuing effects of the economic recession. Governor Gregoire has signaled a willingness to take a more balanced approach between cuts and revenue enhancements. In the context of the total size of the fiscal impacts of the recession, however, her revenue proposal will only be a drop in the bucket and will not save crucial services.

During the last session, the state cut $3.6 billion in public services—cuts that will hurt state priorities such as the quality of education at every level, the availability of affordable health insurance, and the quality of our health care infrastructure. There were a few pieces of legislation that raised revenue, but no meaningful tax increases.*

The Governor’s budget proposal that was released on Wednesday follows in the same vein, with no revenue increases and $1.6 billion in cuts. However, the Governor also announced that she would introduce a second budget in January that would include roughly $1 billion in cuts and $700 million in revenue increases.

The Governor's proposal is a start to the conversation, but a bolder, more balanced approach is needed.

First of all, the $700 million would do nothing to save programs that help working families pay for child care, prevent costly health problems by supporting at-risk pregnant women, and clean up toxic sites. These are just a few of many cuts proposed in the Governor’s first budget proposal that she has not signaled will be protected in her second proposal.

And even with the Governor’s forthcoming revenue proposal, the approach the state has taken to the total budget shortfall will still be severely imbalanced. Combining the Governor’s proposal with the previously enacted revenue policy, revenue increases would only make up eight percent of the total solution to an over $11 billion problem (see graph below). Cuts in core public services will total 40 percent.

* Revenue legislation passed in the 2009 session gave the Department of Revenue more oversight of purchases for resale, authorized multi-state lottery agreements, increased out-of-state auditing, and opened new liquor stores.

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