Whose ‘Revenue’?

n Wednesday, Gov. Chris Gregoire proposed a 2010 budget that was balanced as required by law. But “I do not support this budget,” Gregoire said, nor do legislators in either political party. After denouncing the budget, Gregoire vowed to submit a second budget in January that will offer fewer cuts and increased revenue. And there’s the trick. Will those revenue boosts include tax increases? It’s looking that way. Gregoire and lawmakers slashed spending in the previous legislative session, and they’ll do so again come January. But in this recession, they must shun tax increases and focus on reform.

Gregoire and legislators already have shown how reform can succeed. This year several state licensing offices were closed and services consolidated. Not only did this save money, but to the surprise of many, services are now performed faster than before. Also, a few state boards and commissions were abolished, and Gregoire vows to dissolve more — by executive order if necessary — and merge duplicative offices.

But the way Gregoire was talking on Wednesday, she believes reform opportunities have been exhausted. So she revealed a worst-case-scenario budget that would end Basic Health Plan coverage for 64,000 people, cut health care coverage of 16,000 low-income children and stop services to 23,000 unemployable adults, plus a horrifying array of other Draconian cuts. Thus, no one believes Wednesday’s proposed budget will ever see the light of day.

Versions of it will, though. Gregoire has not identified any new revenue streams (she says closing tax loopholes likely will be one source). She wants to keep the search for revenue an open process and consider all ideas. In other words, much work remains to be done. But that same rigor should be applied to reform. When times are tough in the private sector, asking the boss for more money is a tough sell. And when times are tough in the public sector, asking the boss (taxpayers) for more money is an equally tough sell. And as an elected official, it could even lead to a new title: politician emeritus.

Instead of just wringing hands over doomsday budgets and running off in search of tax increases, many more reform measures should be considered. One area is privatizing state services. Gregoire and many legislators are reluctant to examine benefits of competitive contracting, likely because it would jeopardize their coziness with state workers and unions. But the Washington Policy Center estimates 10 to 20 percent could be saved in cases where the government monopoly is broken. The center cites statistics posted in other states, including Texas, where the 1993 creation of a Council on Competitive Government has saved taxpayers “tens of millions of dollars over the years … $28 million in 2008 alone.” Louisiana lawmakers expect their commission to find $802 million in savings in the next biennium.

In our state, a competitive contracting law that was passed in 2002 was designed to expedite privatization, but legal wrangling with public-sector unions has blocked the way. If the governor and legislators are serious about reform, they’ll find ways to break the unions’ stranglehold and follow other states’ examples.

Speaking of privatization, state Sen. Tim Sheldon, D-Potlatch, estimates $53 million in leases and employment costs could be saved each biennium if the state privatized liquor sales, as all but a few states have done. According to the Kitsap Sun, Gregoire’s office disputes those savings, but Sheldon’s repeated introduction of bills related to privatizing liquor sales leads us to believe this kind of reform is worth considering.

No matter what happens, more state services and programs will be cut this year. But the best strategy in response to a projected $2.9 billion deficit is reform, not bleeding more money out of taxpayers at a time when they can least afford any added burden.