In Our View: State Faces Balancing Act

Inslee, legislators need to start planning now for tough budget decisions ahead

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It was the equivalent of tossing a snowball to warn of a coming avalanche. Gov. Jay Inslee last week proposed a 2014 supplemental state budget that would add about $200 million in spending to the $33.6 billion, two-year budget passed earlier this year by legislators.Inslee will send to legislators a plan to add $6.9 million to expand prison capacity, $7.6 million for public schools, and nearly $11 million to cover recent and anticipated wildfire damage, among other items. Collectively, that's the snowball; the avalanche will come a year from now, and it's time for Washingtonians and their representatives to begin preparations.

"This is a hold-steady budget that keeps us whole the remainder of the biennium," Inslee said. "But we'll have to make some tough decisions again next year. Holding steady this year will allow us to prepare for the next year when the situation and the task before us will be greater. Slow and steady improvements in our economy will not be enough to keep pace with the rising mandatory costs of state services."

Tough decisions, indeed. Like trying-to-gnaw-through-a-leather-boot tough. While this year's budget is simply an amendment to what lawmakers had passed earlier, the next biennial budget due in 2015 will be a statement of values for the state.

Atop the priority list will be money for K-12 education. Complying with the McCleary decision as mandated by the state Supreme Court will require about $5 billion over the next two biennial budgets. Legislators added $1 billion for K-12 education to the budget passed this year, and then patted themselves on the back. More will be required the next time around.

State Sen. Ann Rivers, R-La Center, said: "In the next biennium, we are absolutely going to have to look at what our options are for making sure we meet (the court mandate)." Rivers said the Legislature will have to examine business tax incentives to make sure they are effective. Inslee indicated he would like to keep research-and-development tax exemptions β€” which, for example, saved Microsoft $18 million in taxes in 2012 β€” in place for another year. But eventually, such tax breaks will need to be weighed to see if they balance out against the needs of Washington citizens.

"A deal's a deal," Rivers said, referring to corporations and their tax breaks. "If you don't hold up your end of the bargain, then maybe we need to look at that deal and make sure it's working."

Such balancing acts will come down to what qualifies under the definition of "raising taxes," which has become the third rail of politics. The mood of the public these days, in Washington and beyond, is such that anything that can be construed as a tax increase is a difficult sell.

"In a lot ways, raising taxes is the lazy way out," said Sen. Andy Hill, R-Redmond, who is the chief budget writer for the Senate's Majority Coalition Caucus. "If you've got a problem, it's very easy to raise taxes. The hard problem is when you dig in, you say how are we running government, how are we spending the money, how do we reprioritize that."

Prioritize they must. Both the governor and the Legislature should openly discuss all options for raising revenue, although such candor is unlikely in an election year. At the same time, any opportunity to trim expenses should be on the table, beginning with an examination of public-employee pensions to ensure they are in line with those found in the private sector.

And these things must be a priority from the start of the legislative session in January, not an afterthought. It's more effective to prepare for an avalanche than to dig out from one after the fact.