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Dear Friends and Neighbors,
Yesterday, Majority House Democrats unveiled their 2010 supplemental operating budget that includes more than $857 million in new tax increases. Simply put, government spending is out of control.
After suspending the Taxpayer Protection Act (I-960) last week, the majority party now intends to fill a $2.7 billion budget shortfall by substantially raising taxes, relying on one-time federal stimulus dollars, and transferring funds from other dedicated state accounts. Despite being in the worst recession since World War II, the majority party wants to spend nearly $31 billion and actually increase spending in one program (General Assistance Unemployable) by a whopping $50 million. This approach will only leave $269 million in state reserves. Here is a snapshot of their proposal:
- $857 million in new tax increases;
- $641 million in federal dollars;
- $653 million in spending cuts;
- $236 million in state budget transfers; and
- $311 million from state reserves.
When factoring in one-time transfers, federal stimulus money and new taxes, the majority party’s operating budget proposes only a 1 percent reduction in spending. This is absolutely unsustainable. We cannot repeat the budget mistakes of the last five years. Now is the time to reject tax increases, and embrace fiscal discipline and state government reform. Below is how I feel we can reach these goals for our budget.
Solutions for the operating budget
First and foremost, we should not suspend the Taxpayer Protection Act (I-960), which voters approved in 2007. This required a two-thirds vote of the Legislature for tax increases. Senate Bill 6130, which was signed into law by the governor today, removes this taxpayer protection and clears the way for tax increases. I opposed this bill and you can read my statement on it here. The operating budget can, and should be, balanced without raising taxes.
Second, we must prioritize state government to focus on education, public safety and the protection of our most vulnerable. This means our state should get out of the business of running liquor stores, insurance companies and other programs that can be handled by the private sector. I also feel we must reduce the size of the state labor force and freeze state employee salaries. It does not make sense that many state employees will be receiving raises at a time when the private sector is reducing wages and losing jobs. Since February 2008, approximately 173,500 jobs have been lost in the private sector in our state, while 7,800 government jobs have been added. These tough economic times offer our state a great opportunity for real reform, but there is a reluctance to challenge the status quo in Olympia.
Finally, we need to reform our budget process. You might be surprised to learn our state had a $1.8 billion surplus four years ago, driven by extraordinary real estate excise tax revenue. So, what happened? State spending grew by 33 percent, more than $8 billion, from 2005 to 2008. We must implement budget reforms to ensure sustainability, accountability and transparency. For example, I support measures that would:
- require exceptional state revenue to be deposited into the state’s “rainy day fund” during good economic times (House Joint Resolution 4209);
- prohibit the governor or the Legislature from proposing an operating budget deemed unsustainable (House Bill 2228);
- require the Legislature to adopt a balanced budget (House Bill 1655); and
- establish a state spending limit (House Joint Resolution 4207).
In closing, there must be a mind shift in Olympia when it comes to fiscal policy. The way forward to a sustainable budget is to create new jobs – not raise taxes. You can learn more about the ideas I support to strengthen our economy by clicking here.
If you feel the same way, please contact the members of the House Ways and Means Committee and let them know that you demand a no-new-taxes budget. For their contact information, please click here. We can fight for fiscal responsibility and sustainable budgeting in Olympia, but I need your help. Together, we can make a difference!
Sincerely,
Jay Rodne
