Open Government Blog

Even though the Governor has yet to acknowledge the projected multi-billion dollar budget deficit (difference between growing revenues and even faster spending growth), key lawmakers are starting to signal a willingness to break the state's new rainy day piggy bank to help balance next year's budget. According to the News Tribune:

"The 2009 Washington Legislature probably will dip into the state’s emergency 'rainy day' savings account to balance the budget because, economically speaking, it’s raining.

Although the state has a budget surplus today, that amount is expected to shrink as Washington’s economy catches up to the rest of the nation and follows a downward economic spiral, due in large part to a sudden drop in home sales and a worsening crisis in the national financial markets.

'It’s pretty clear that things are not going to get better soon,' said state Sen. Margarita Prentice, D-Renton, chairwoman of the budget-writing Senate Ways and Means Committee. 'It looks as if we will (tap the rainy day fund). We can’t commit to a figure, but I think it’s pretty clear for now that everything has to be on the table.'"

Voters created the constitutional rainy day account last November to help the state weather downturns in state revenues.

Which leads to the question, is it really an unforeseen rainy day if lawmakers have spent the last few years seeding the clouds with unsustainable spending increases? 

The Olympian today has an interesting blog post quoting Governor Gregoire about whether or not she's raised taxes (excluding gas-taxes). Here is what the Governor said (in-part):

"Did I raise your sales tax? No. Did I raise property taxes? No. In fact, I brought the Legislature in to cap the property tax with a special session last fall. Did I raise B&O tax? No. What’s the truth? The truth is we cut those taxes almost by $900 million since I came into office. So the money that we used to do what we’ve done has been because our economy has been humming. And that’s why I’ve tried always to get new employers in here and to make sure we have the skilled work force, because when the economy hums, we can pay for education, we can pay for health care, we can pay for community safety. When the economy slumps, then we can’t." "So he [Rossi] then!
says, ‘she is going to raise taxes,’ Well I didn’t raise taxes to get out of the $2.2 billion deficit he gave me. On what basis does he say that? … (H)e wants you to be afraid. He wants you to be afraid. I just think this ought to be a straight-up election."

Based on this quote one is left to wonder just what the Governor believes qualifies as a tax increase. For example, in 2005, the Governor signed into law approximately $400 million in tax increases made possible by suspending the 2/3 vote requirement from I-601. The largest of these tax increases were:

• Cigarettes – $175 million
• Death-tax – $139 million
• Liquor – $47 million
• Extended warranties for product repairs or replacements –  $37 million

These tax increases were the subject of a court challenge for violating I-601 but were ultimately upheld by the State Supreme Court last year (this is a separate lawsuit than the one heard by the Court this week).

If these aren't tax increases, what exactly are they and why did the Governor and Legislature feel the need to suspend the 2/3 vote requirement in 2005 to adopt them?

While reviewing state personal service contracts back in July, a $50,000 lobbying contract for the University of Washington (UW) caught my attention. Unfortunately, the information listed on the Office of Financial Management's website didn't disclose what the lobbying was for so I asked the UW for a copy of the contract. Nearly two months from my first request, I finally received a copy of the contract today.

Turns out the $50,000 contract is for a consultant "to provide legislative drafting and fiscal analysis related to the 2008 request for state financial assistance to remodel Husky stadium." The contract was originally to expire March 31, 2008, but its terms have been extended until June 30, 2009.

The contract further notes the "consultant will be paid $175 per hour for his services, and receive reimbursement for associated reasonable expenses, including travel costs."

Here is a copy of the contract.

In a strange coincidence, the Spokesman Review this week highlighted the bad blood east of the Cascades for efforts to use taxpayer dollars to remodel Husky stadium.

• Huskies' reach for taxes hits Cougar nerve
• Taxes are no fun

Although Husky stadium may need renovations, rather than paying a lobbyist $175 per hour to secure taxpayer funding, why not use some of the UW's $2.7 billion endowment or asking for alumni help?

While Bellevue teachers engage in an illegal strike over pay raises, Governor Gregoire last week sent a memo to agency directors informing them of her plans to cancel their pay raises. According to the Governor's memo:

"After much thought and in light of our nation's economic struggles, I have decided the cost of living raise, which you were scheduled to receive on September 1, 2008, is not appropriate at this time. My decision affects all agency directors under my control in addition to the Senior Staff of the Governor's Office . . . I take this step because I believe you and I should make a clear statement to the people of Washington: we understand that many families are not rece!
iving pay raises while coping with high food and fuel prices, and other financial challenges."

So what "statement" are Bellevue teachers sending taxpayers and students by breaking the law?