By: Sen. Adam Kline

In December, Governor Gregoire proposed her budget. As we all expected, she called for no new taxes and addressed the revenue deficit by slashing about $3 billion in funding for a wide range of programs, suspending voter initiatives and borrowing some money.  She proposes taking about $600 million from the state's new Rainy Day Fund and pulling about $204 million in lottery proceeds out of the state's construction budget, replacing it by selling bonds.  Her budget assumes a federal bailout of about $1 billion, which is expected to help the state pay for Medicaid, Temporary Aid to Needy Families (TANF), and related social welfare programs.

For her budget, the Gov made an effort to find a way for a wide range of Washingtonians to equitably share the burden of our budget crisis.  She proposes across-the-board cuts, including state employees and services, K-12 and higher education, private and public social services, prisons, health programs, state parks, environmental programs, and public safety.  While I don’t agree with many of the cuts that the Governor proposes, I respect her effort to devise a tenable plan in an untenable situation. 

But, I feel like she is squandering this opportunity to reform our tax system — even if it means instituting new taxes.

In a recent column for the New York Times, economist and Nobel Prize winner Paul Krugman wrote that President Herbert Hoover erred terribly in 1932 when he tried to balance the budget during the beginning stages of the Great Depression.  Krugman believes that the Obama administration will "put deficit concerns on hold while it fights the economic crisis” and won't make drastic cuts in social assistance programs at a time when people need them most.

But Krugman notes that the country will suffer because state governors will likely replicate Hoover's mistake. Like Gov. Gregoire, most governors are bound by law to create a balanced budget and will be "slashing spending in a time of recession, often at the expense both of their most vulnerable constituents and of the nation’s economic future...these state-level cutbacks range from small acts of cruelty to giant acts of panic."  Krugman suggests that we "step back for a moment and contemplate just how crazy it is, from a national point of view, to be cutting public services and public investment right now.” 

I agree with Krugman.  Although the Gov is required to propose a balanced budget, the Legislature isn't bound by that requirement.  Nor are we bound by her commitment to "no new taxes."  We have a long, hard road ahead of us to create a budget that does a better job of protecting vital programs.  It's not just the next few years that I'm worried about.  Obviously, cuts in vital programs like the Basic Health Program and community health clinics will have an immediate negative effect on the health and well-being of thousands of Washingtonians.  But even if we're able to restore funding to these programs in a few years, long-term damage will have been done.  The major decrease in funding for places like community health care clinics will lead to closures, the loss of good personnel, and the loss of support systems that have taken years to build up. Many of the people who aren't able to get adequate medical care in the next few years (and who survive) will develop more expensive health problems down the line. It will take many years for our communities to recover from the damage we cause by making these cuts.

Our state and federal government have never funded vital programs like public health care as we should. I believe that the sheer immensity of our current revenue shortage has not yet settled into the public mind. It is bigger than we have had to face in many decades.  I strongly believe that we need to institute short-term and long-term tax reform that will be needed to save as much of our state's services as we can.

Our state is broke in part because of the nationwide credit crisis and recession.  But that's only part of the story. The rest will be my next post…