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In Our View: No Snake-Oil Budget

State legislators should avoid temptations of quick financial fixes

The Columbian
Published: April 1, 2011, 12:00am

If snake oil could be burned in internal-combustion engines, American politicians could reduce our dependence on foreign oil. There’s enough of this slippery stuff flowing around legislative chambers these days to convince us that the same fake cure-all sold to gullible pioneers more than a century ago has not yet gone out of style. Taxpayers, though, are no longer buying.

In Olympia, legislators are so desperate to resolve a projected budget deficit that state Treasurer Jim McIntire (one of the state’s more level-headed officials) has warned against snake-oil solutions. We hope Clark County lawmakers listen to McIntire and remind their colleagues of his wisdom. Two examples of what McIntire insists must be avoided:

Borrowing against tomorrow — More advanced minds like McIntire call this one “securitization.” Others know it as the temptation to pay for stuff today with money you don’t have but expect to receive, like the income-tax-refund-anticipation loans you see offered as the filing deadline nears.

In 2002, legislators borrowed $450 million by selling a portion of future payments of the 1998 national settlement with tobacco companies. McIntire says that decision has deprived education and health services of vital funding, and the interest and principal on the debt will cost the state $100 million over the next biennium.

Understandably, the pioneers are no longer quite so gullible.

Intentionally misreading the calendar — If the snake-oil peddler told you there will be 25 months in the next two years, you probably wouldn’t believe him. Our legislators, though, are not above convincing themselves such might be the case. In 1971, the Legislature added a 25th month of revenue to the next biennium. Whoo Hoo! Free money! Uh, not exactly. McIntire said it took almost 16 years for the state to pay its way out of such foolhardiness.

Gov. Chris Gregoire has joined McIntire in warning against snake-oil solutions. Reactions from lawmakers range from there’s no way this could be allowed (they probably said the same thing back in 2002 and 1971), to “very, very unlikely,” to nothing has been taken off the table.

Speaking of tables, here’s a list that belongs on the budget-writing desk. It’s called “Principles for a Good Budget” as determined by minority Republicans in the Legislature. To comply with this list, a budget must be “sustainable; no use of one-time money for ongoing programs; no transfers from other budgets; strong reserves to meet unforeseen emergencies or revenue drops; protect constitutional mandates; transparency (no gimmicks); utilize priorities of government; reflect priorities of governing board (governor); minimize legal disputes; seek efficiencies and reforms where cost effective; no new taxes; restrict fee increases to benefit of payer; and provide flexibility in administrations/compliance.” Good tips, all.

Finally, McIntire warns against solutions that become problems. “The gimmicks we have to watch out for are the ones that create a long-term liability for the state,” he said.

The House is said to be getting close to agreeing on a proposed budget, perhaps sometime next week. The Senate will follow with its plan. Nowhere in any of those budgets should there be one drop of snake oil. It’s 2011. The pioneers are long gone.

Our state’s financial crisis is like any ache or pain: It requires meaningful, long-lasting treatment, not interim elixirs.

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