The budget speech we should hear today

At noon today the final piece of the state's 2013-15 budget debate will fall into place as the March Revenue forecast is officially released. Due to the impact of the federal sequester, indications are that the currently projected nearly $2 billion increase in revenue for the next budget will be slightly reduced. While this will still mean revenues will be growing, it will likely fall short of funding the projected baseline spending increases and new policy adds Olympia would like to pursue.

With that in mind, here is one budget speech from November 2002 that we should hear today from the Governor and legislative policy makers, but probably won't as calls for tax increases begin to crescendo off the halls of the Capitol:

Governor Gary Locke (D) announcing Priorities of Government budgeting (POG)
As you know, we’re forecasting a $2 billion deficit for the next biennium in the General Fund and a half billion in the Health Services account. These are tough economic times for all states, and Washington’s problems are severe.

We face a dilemma with our budget. We don’t want government to be any more expensive. That means an increased drag on our struggling economy. But we don’t want to compromise the quality of the vital services we provide to citizens either. State services and programs support the health of communities and the economy. One way or another, something has to give.

Past deficits have been addressed mainly by looking at the existing budget. Taxes can be raised to just keep doing what we’re doing. We know that isn’t a preferred option. Or costs are shaved until the spending plan fits the available revenue. Usually, an across-the-board reduction in costs is used to reach the goal.

Such an approach fails to take into account many factors. It doesn’t consider relative priorities of programs and services. It fails to allow for varying levels of cost effectiveness and overlap in different areas. Reductions in costs—and the programs and services they support—happen agency by agency without regard to the rest of the enterprise.

We are convinced there is a better way. This year, we decided not to start with current spending to try to meet the forecasted revenue. Instead, we decided to look at how we should be spending our state’s money in the first place. We decided to look at our Priorities of Government.

We are looking at what matters most to Washington citizens. We are focusing on results that people want and need, prioritizing those results, and funding those results with the money we have.

As we do this, we are taking an enterprise-wide approach. We are thinking of our state government and all its agencies as a whole. We’re figuring out how our enterprise, working as one entity, can achieve the results that matter most to our state’s citizens.

With our Priorities of Government effort, we are asking four questions:

1. How much money will we have to work with for 2003-2005?

2. What results do our citizens want most from state government?

3. How much money can we allocate to each result?

4. How best can we spend allocated funds to achieve the results?

Then we took a look at all activities in state government today. We asked every agency to prioritize all activities into three categories, highest to lowest. We required that they place at least one-third of their activities in the lowest priority category . . .

We assembled 10 multi-agency teams, one team for each result. We’ve asked the teams to tell us how best to attain the desired result. What programs and services make the most difference? What can we consolidate? What programs and services aren’t making as much of a difference? What criteria can guide us in assessing value and deciding what should be funded? What key indicators will tell us when we’ve achieved the result and given people what matters most?

The teams have had free reign. No rules, no politics, no agenda imposed from above. One limit: they have to rely on existing financial resources in achieving the desired result. And this will result in some very, very difficult decisions because we cannot simply fund everything we have in the past . . .

We have the right questions. The questions take a complex process and distill it right down to its basics. When we are finished, we will have thoughtful, disciplined and creative answers to these questions. Our Priorities of Government will be identified and funded. Perhaps not at the level we would like, but we will invest in identified priorities.

Of course, we may hear from our policy makers today that they are using Priorities of Government budgeting. If they are, one thing will be crystal clear, any proposed tax increases will be directed at purchasing activities that are at the bottom of the state’s buy list, not the top. Essentially, policy makers advocating for tax increases after using POG are communicating to citizens that those items not purchased are the state’s lowest priorities and everything else purchased by existing taxes is a higher priority. This means under a POG budget any tax increases will be for those low priorities that didn't make the cut.

Update (12:18 p.m.)

According to today's Revenue Forecast, budget writers will have $2 billion more in revenue for the 2013-15 budget over the current 2011-13 budget:

• 2011-13: $30.8 billion
  
  
• 2013-15: $32.6 billion
  
  
• 2015-17: $35.5 billion

From the Revenue Forecast conclusion:

• The forecast for the 2011-13 Biennium is $59 million higher than in November
  
  
• The forecast for the 2013-15 Biennium is $19 million lower than in November
  
  
• Revenues are expected to grow 8.2% between the 2009-11 and 2011-13 biennium and 6.6% between the 2011-13 and 2013-15 biennium
  
  
• We continue to forecast slow economic and job growth for both the national and state economies
  
  
• The level of uncertainty in the baseline remains extremely high, and downside risks outweigh upside risks