This week, House Democrats unveiled their $53 billion state operating budget proposal for the upcoming 2019-21 biennium. Unsurprisingly, their budget dramatically increases state spending — funded by new taxes on businesses, home sales and capital income — proving yet again that it’s easy to spend money that isn’t yours.
All told, their proposal grows spending by more than $8.5 billion beyond current levels. For context, when I was first elected in 2014, the state budget spent $33.7 billion. Between economic growth and new taxes, state revenue will have increased by about 57 percent in five years.
Has your salary grown by 57 percent since 2014? Probably not, as average annual wage growth is hovering below 4 percent.
Structural issues are largely responsible for this alarming rate of budget growth. Each year, lawmakers enact all sorts of new programs and services, predicated on promises of long-term savings and improved social and health outcomes. Once enacted, these programs are almost always automatically funded in subsequent years, with virtually no oversight or review by the Legislature.
The result: spending persistently outpaces revenue, enabling our most essential services to be held hostage in exchange for new taxes.
There is a better way.
This session, I introduced a package of budget reforms, co-sponsored by many House Republicans. These reforms are agnostic about specific programs and policies, but will supply the Legislature with tools necessary to begin budgeting in a more responsible fashion.
• All programs should be reviewed to ensure taxpayer funds are being spent efficiently and effectively. Rather than the status quo of automatically funding all existing programs, House Bill 2149 would direct state agencies to zero-base their budgets from the bottom up and identify programs or services that may no longer be justified. Because the Legislature is part-time, agency administrators and employees are better suited to identify programs that are unnecessary, inefficient, or outdated, so funding can be redeployed more effectively.
• New programs should include performance metrics so lawmakers can undertake an honest review of the programs and fix ineffective programs. For most new state spending programs, House Bill 2150 would require the Legislature to identify goals and performance metrics for the program and cause it to sunset within 10 years (a process already followed for tax incentives). The nonpartisan Joint Legislative Audit and Review Committee would conduct a performance audit and recommend whether the program should be renewed, modified or allowed to expire. This will keep ineffective programs from being permanently incorporated into the budget.
• Lawmakers should be given the tools to evaluate the impacts of legislation on the economy as a whole. Currently, new legislative spending proposals undergo a “static” fiscal analysis that only examines the direct costs to the government. House Bill 2151 would enable lawmakers to request “dynamic” fiscal notes that analyze net impacts, including behavioral changes of people impacted by the proposal, and how legislation might influence the state’s economy overall.
• Today’s spending decisions should be sustainable over the long term. Unlike Congress, the Legislature must adopt a balanced budget. But clever lawmakers used budget gimmicks to postpone costs until the next budget period, enabling the Legislature to pass policies it couldn’t afford and fueling unmanageable spending growth. Thankfully, these tactics were slowed by a 2013 law requiring the budget to be balanced over a four-year period. House Bill 2152 would extend this further by requiring budgets balanced over a six-year outlook period, resulting in a more sustainable and predictable budget with fewer accounting gimmicks.
Collectively, these reforms will provide more factual analysis to lawmakers and the public, so that budget negotiations are better informed. They will also identify and eliminate ineffective programs, resulting in state government operating more efficiently and reducing the constant pressure for new taxes.
While I look forward to debating my friends across the aisle on their choice of spending priorities and tax increases during the final five weeks of this legislative session, future debates could rely more on data and less on emotion if the Legislature adopts these four key reforms, which provide a better way for a better Washington.