More than 500,000 Washingtonians lost jobs because of public-health measures ordered by Gov. Jay Inslee.
Those mandates were necessary and saved lives. But now the state itself must make similar sacrifices.
To continue strong leadership through this crisis, Inslee must boldly cut state spending and cancel an upcoming state-employee raise.
To do otherwise prioritizes powerful public-employee unions over state residents, who will get less from their state government. During the last recession, Inslee’s predecessor, Gov. Christine Gregoire, had to make even more severe payroll cuts.
This is difficult but far less painful than what many other employers are doing to comply with Inslee’s shutdown orders. Unemployment is the worst since the Great Depression, and many businesses remain closed, some permanently. State revenue is expected to plunge at least $7 billion, and potentially up to $11 billion, over the next three years.
Even so, state-employee unions are still expecting a raise negotiated back when Washington’s economy was generating a gusher of tax dollars. That contract provided two raises, 3% last year and 3% starting this July.
Canceling raises is not desirable. State employees are important and appreciated. But the July raise should not happen when the state must immediately cut spending and avoid increasing spending obligations going forward.
Canceling raises won’t erase the shortfall, but it provides substantial savings, nearly $800 million. Many hard budget decisions are forthcoming, and the raise makes them harder. It should be the easiest and most obvious of those decisions.
If the raise occurs, there’s less money for services. Pick a service — early-childhood education, support for foster children, parks, natural resources — and tell Inslee and your legislators which should receive less funding so state employees get the second raise in their contract.
Inslee and Democrats controlling the state House and Senate punted in not agreeing to a special legislative session this month to trim other spending programs starting in July. House leadership was willing to meet sooner, but the Senate balked. Now the plan is to convene in August, in hopes Congress comes through with another stimulus package and the state won’t have to cut as much.
At that point it’s harder, if not politically impossible, to cancel the raise: It’s far easier for politicians, most of whom are up for reelection this fall, to hold wages steady than to cut them.
One option being discussed is to provide the raise but furlough state employees for two weeks a year.
But that’s still avoiding the hard but necessary decision to reduce spending below current levels. State unions would preserve their second raise, while Washingtonians would pay the same or more and get less government service. That power imbalance also helps explain why some legislators are considering big tax increases, even though many residents and employers are struggling to get by, to avoid reducing state spending.
Employers commonly use furloughs to reduce spending and survive a budget crisis. If the state does furloughs, it should do so in a way that reduces spending below current levels. Otherwise it’s a charade.
What Inslee should really do is declare a revenue shortfall so the state can reopen current labor contracts, as Gov. Gregoire did in 2010. Gregoire earlier tried furloughs, but they didn’t reduce spending enough.
“By necessity, government must be smaller. We must make a dramatic shift in what can be expected of state government,” Gregoire said at the time.
During that recession, minimizing layoffs was the priority, not preserving raises. After the shortfall was declared and contracts renegotiated, salaries were reduced 3%. That was to save the state roughly $330 million over the next biennium.
Now, canceling the 3% raise would save an estimated $261.7 million just in fiscal 2021. Through the next biennium, savings would be roughly $785 million.
Inslee could even recycle the quote in Gregoire’s 2010 announcement:
“That amount of savings would pay for child protective services and foster care for our abused and neglected children,” she said. “Or it would pay for our entire learning assistance program that helps our struggling students across the state succeed in school. State employees have stepped up to share in the sacrifice to get all of us through our fiscal crisis. They have done what thousands of families across Washington have done — they’ve made sacrifices, focused on their highest priorities and aimed for long-term prosperity.”
Such decisions are hard but necessary to start aligning state spending with plummeting revenue. They also give leaders credibility when they cut programs and force residents to get by with less from their state government.
Canceling raises would demonstrate Inslee and the Legislature are realistically confronting the state’s fiscal crisis, prioritizing the needs of all Washingtonians and not clinging to the spending mindset of 2018.
Postponing the inevitable only makes it worse for everyone.