Month after month, the revenue forecast (tax-collection estimate) for Washington state has been grim. The economy has been churning, but not making much progress.
The lack of revenue has made budgeting onerous for the Legislature, which is now in its second overtime session.
The Democrat-controlled House wants a combination of cuts and new tax revenue, while the more conservative Senate wants to balance the budget by only reducing spending.
This week some good news about the state’s economy emerged, which should make the budgeting process a tad easier. The latest revenue forecast shows the state could have an extra $231 million over the next two years for its general operating budget.
Even in a budget of approximately $32 billion it could bridge enough of the gap between the House and Senate for the Legislature to come to an agreement before the shut-the-government-down deadline of July 1.
What can’t happen, however, is for the lawmakers to become so enthused by the uptick in the economy that it triggers any increase in spending.
This is a time to get long-term spending under control. Spending this new cash as quickly as possible is exactly why the state has been battling red ink for years.
Rep. Terry Nealey, R-Dayton and a member of the state’s Economic and Budget Forecast Council, was quick to urge restraint with the projected cash.
“Let’s also be clear: Just because the revenue projection is up doesn’t mean the Legislature should be trying to find more ways to spend it on new programs,” Nealey said. “Let’s take care of funding education first and then make sure we have a responsible reserve to be prepared for any further downturns in the state’s fragile economy.”
That’s sound advice.
The state is still a long way from financial security.
The budget gap is still in the hundreds of millions and another $1 billion is needed to fund basic education as is required by the constitution and ordered by the Supreme Court’s recent McCleary Decision.
The state needs to stash as much cash as possible as the economy grows.
Healthy reserves will allow the state to more easily weather ups and downs in the economy.