Hair-on-fire ranting usually draws the most attention. Such a tactic is much easier than any in-depth analyses. And, best of all, it’s much easier for the media to cover. Nevertheless, while we’re all sharpening our pitchforks and larding up our torches in preparation for our march on Olympia to storm the Capitol for raising our taxes, several calmer minds have taken a more academic approach.
Before I report the findings from the geeks, allow me to address the popular belief that the public sector should be run like the private sector. In many ways, this is true. Certainly, employee pay and benefits should be comparable in both sectors. But in other ways, government and business are strikingly different. The Great Recession illuminates one difference. In these times of plummeting revenues for state governments, many needs for government services actually increase. Less revenue + more need = budget crisis. Factor in the political element of an election year, and the budget-writing challenge gets even tougher.
Time magazine (June 28) reports a good example of this dilemma. In Arizona, “government revenues have sagged to 2004 levels.” No problem, some folks would say: Simply adopt the 2004 budget and solve the problem just like they would in the private sector. Bada-boom! Bada-bing! But that’s the short-sighted response. The deeper reality is that Arizona has added 475,000 Medicaid recipients since 2004. Such an increase in client demand during a recession is rare in the private sector. But for states, increases in demand are also bubbling up in public education and other social services.
Our mutinous raid on the state Capitol — from whence we shall throw all the bums out after they stole our money and purposely orchestrated the total destruction of our society — loses a little steam when we more analytically view the Legislature’s work this year.
Instead of rage, statistics
Many of the pitchfork-pounders would be surprised to learn that revenue increases accounted for only 8 percent of the actions taken in Olympia to balance the state budget this year. Most of the key actions were one-time transfers and changes, federal recovery funds (increasingly unreliable) and deep cuts in education, health care and economic security. These statistics are according to the Washington State Budget & Policy Center, none of whose staffers has a coiffure ablaze. Instead, less demonstratively, they simply look at the facts. Here are some more facts:
? More than one-third of the revenue enhancements “will not increase taxpayer liability compared to previous years.” These include tougher auditing and compliance efforts, technical clarifications and other wonkish tweaks.
? Most of the new tax increases will expire in 2013. Of course, critics scoff at that promise, but wise voters will keep the pressure on during legislative elections this year and in 2012.
Now let’s view our state’s budget crisis from the national perspective:
? Washington state revenues were increased this year by about 3.6 percent. Outrageous during a recession? Perhaps, but that’s slightly below the 3.8 percent average increase of revenues in the 32 other states that did the same thing. (This information is from 2009-2010 in our state but just 2009 in the other states, where the 3.8 percent average likely will be much higher when 2010 is included.)
? Yes, we’re in bad shape, but about half of the other states are in worse shape. Time magazine gives two disturbing examples: California and New York each has a state economy “far larger than that of Greece, which so disturbed the world economy this spring.” IOU-issuing California is about $19 billion in the hole. In New York, the deficit is $9.2 billion. Turns out, our state’s calamity, though alarming, is mild compared with other places’.
The hair-on-fire approach is not only futile (not to mention a waste of the fire department’s time), it’s also temporary. It has taken many decades for Washington and other states to create this mess, and it will take many decades to work our way out of it. No, wait, I just remembered the increasing government service demands from baby boomers, so change “many” in that previous sentence to “innumerable.”
John Laird is The Columbian’s editorial page editor. His column of personal opinion appears each Sunday. Reach him at john.laird@columbian.com.
