Tuesday, March 31, 2009

This is not the all-cuts budget

The Senate budget proposal released Monday will require a 2/3 super-majority vote to pass because it contains tax and fee increases. Thanks to Tim Eyman's team and Initiative 960 they can't increase taxes with a 50% majority. Senator Lisa Brown sued us to overturn it, but lost. The Democrat majority happily increased programs during the good times. While saying good words about caution for possible tighter times ahead, they created new programs that "have to be funded." The 2005-07 biennium increased spending by 17.8%. They have been in idle session since early January; they still have the opportunity to set clear priorities and make structural changes. But it requires hard choices and confronting their big donors. As Stefan points out in his post, if they cynically cut in areas the voters support the most it puts pressure on the public to accept tax increases (that make their job easier). Spending increases - People who have read the thing say there are increases in state employee health care benefits (or reducing what they pay) and illegal aliens would continue to receive health care. They will surely find more. Are you going to call your honorable representatives and demand they increase taxes? Paul Guppy at Washington Policy Center says...
“The Senate Democrats’ budget underfunds some core public services and relies on temporary one-time funding, while failing to address how the state got into such a deep financial trouble in the first place,” said Paul Guppy, Vice President for Research at Washington Policy Center. Failure to set clear priorities created a structural spending deficit by locking in past activities, regardless of importance, while leaving more urgent needs unmet. This results from the Legislature’s habit of “reverse budgeting,” in which routine government activities are funded first while high-priority needs are left in fiscal crisis.
Senator Joe Zarelli speaking for the Republicans points out:
“The state expects to take in as much revenue in the next two years as it will in this biennium, so it really does come down to priorities. Senate Republicans have shown how the Legislature could produce a budget that is balanced without higher taxes, protects services for the most vulnerable and does not repeat the mistake of relying on gimmicks or one-time money. Unfortunately the Senate Democrat proposal falls short on all of those fronts. It does almost nothing to produce the kind of farsighted change Olympia and our taxpayers badly need. “Instead of making policy adjustments that will generate substantial ongoing savings, this proposal is about punting and doing temporary backfill that would put off the problem for another two years. It keeps spending artificially high by playing about 3 billion dollars in federal money plus some ill-advised fund transfers that include a raid on the capital budget. “It’s not whether you take the federal money, it’s how you spend it. These are dollars we can only spend once – but this budget would use them to maintain programs and services. That is exactly the approach which started our state down the road to a deficit...
The Olympian - Olympia, Washington on the tax increases:
... The GOP has argued from Day One this legislative session they believe a balanced budget can be achieved without new taxes. Budget highlights made public by Senate Ways and Means Committee chair Margarita Prentice show that 30 pending bills are needed to implement the budget that she, Tom, Senate Majority Leader Lisa Brown and two colleagues rolled out this morning. Here is a list of seven that call for tax increases and 10 that reduce taxes. The tax increase list includes closures of tax exemptions such as Senate Bill 6062, which proposes to bring in $54 million by ending a break on the real-estate excise tax for banks that dispose of foreclosed properties. One other would bring in $36 million by ending a sales- and use-tax break for purchasers of hybrid-fuel vehicles. Ten proposals would give new or larger tax breaks. The most expensive is $10 million for SB 5899, which proposes to let businesses with fewer than 10 employees to reduce business taxes by $2,000 to $4,000 for each employee they add to the payroll.
Cross posted at my blog Economic Freedom.