I’m not sure what Bruce Ramsey’s point is?
According to the latest story, the projected deficit in state government finances is $5.1 billion, up from $3.2 billion. The Times said before the election, in our endorsement of Dino Rossi, that the deficit might get to $5 billion by next spring, and we arrive at that figure early, in November.
A progressive blogger accused us of making a deceptive noise about the deficit, which he said did not really exist and was only a projection. Of course, that was before the election, too. Now it’s over, and the big problem is in the lap of Gov. Christine Gregoire and the two houses of the Legislature.
Well, it wasn’t a budget deficit, it was a projected revenue shortfall, and the size of the shortfall really wasn’t the issue. The next biennium budget will be balanced, one way or the other, regardless of who is governor or which party controls the Legislature. The issue in the election was always, who do we trust to make the hard choices necessary to balance the budget, consistent with the values of the majority of Washingtonians?
(Hint: the voters’ answer was Gov. Gregoire.)
As for “deceptive noise,” it certainly was, and still is. This budget crisis is not the result of overspending; the culprit in Washington, as in every other state in the union, is declining tax revenues. Gov. Gregoire did not create this shortfall… our crappy national economy did. And the Times’ efforts to promote Rossi as some sort of punishment or remedy for a revenue shortfall Gregoire didn’t create, was indeed deceptive.
It also serves to distract from the larger issue of Washington’s long-term structural revenue deficit, that when projected through both the good and the bad years, absolutely guarantees that state spending as a percentage of the state economy will steadily and dramatically shrink over the next few decades.
During the final few weeks of the campaign, Rossi and his surrogates relentlessly attacked Gregoire, alleging that she would instate an income tax. She can’t and she won’t. But despite its lack of political support, and even though such a dramatic restructuring could not possibly be implemented fast enough to address our current budget crisis, it is past time to start having a serious discussion about how to modernize our state tax system to meet the needs of our 21st Century post-industrial economy.
Our projected, $5 billion shortfall is largely the result of a particularly steep, downward swing in the economic cycle, but given a tax system that year over year taxes an ever shrinking portion of our economy, the long-term deficit will remain, even after the good times return. Our current tax system is a 75-year-old improvisation, hurriedly constructed in the wake of a controversial court decision that overturned a voter-approved income tax, and it has long since proven itself to be outdated, inadequate and grossly unfair.
Now is the time to start a real discussion about how to modernize our tax structure to meet the needs of our modern economy. And if the Times is willing to put aside the rhetoric and seriously join this debate, I’ll be more than happy to join them.
I’m sure Goldy will delete this, but I’m going to cut and paste it anyway. From Dori Monson’s blog:
“Dori, there is no deficit”
“Dori writes…
That is a direct quote from Governor Gregoire on my show when I asked her about the projected $3.2-billion state budget deficit. That was two months ago.
Wednesday, we got a revised projection from the state – and, while almost everyone in government is expressing shock at how bad it is, it’s almost exactly what I predicted a month ago. I said on the air that the deficit would likely be closer to $5-billion. And it is now expected to be $5.1-billion. As Reverend Wright would say, “the chickens have come home to roost”.
Gregoire and her Democratic legislature have increased state spending from $25-billion when she took office four years ago to over $33-billion today – a staggering 33% increase.
They have the audacity to claim that the new, horrible projection is due to declining revenues. but that’s a flat-out lie. Revenues haven’t declined. In fact, they’ve gone up. Just not as fast as they had projected. State tax reveunes will increase 5% – but they had projected an 8% increase.
Our governor acted exactly like the Big-3 automaker CEO’s and the thug UAW union bosses – just soak as many people for as long as possible and hope the inevitable downturn never comes. Many of us sounded the alarm when the guv rolled out an unsustainable budget a couple years ago – but we were dismissed as alarmists.
Two weeks ago, Christine Gregoire was reelected with 53% of the votes.
Heaven help us all.”
May I propose that the deceptive noise is coming from those who say the answer to budget deficits, or revenue shortfalls, or whatever you want to call it (I’m not going to get sucked in to a semantics game) is to increase taxes, instead of reducing spending. THAT’S the deceptive noise.
An Income Tax is only fair. Soak the rich.
Goldy–
We have long ago called BULLSHIT on you and your feeble wordsmithing attempts.
When in doubt, go to the Thesaurus:
deficit
Synonyms: absence, arrear, arrearage, arrears, back debts, back payments, balance, beggary, bouncing check, break, credit, decline, defalcation, default, defect, defectiveness, deferred payments, deficiency, deficit financing, delinquency, deprivation, destitution, difference, discontinuity, discrepancy, dollar gap, drought, epact, failure, falling short, famine, gap, hiatus, imperfection, impoverishment, inadequacy, incompleteness, inferiority, insufficiency, interval, lack, lacuna, loss, missing link, need, net, omission, outage, overdraft, remainder, scantiness, short measure, shortage, shortcoming, shortfall, slump, starvation, surplus, ullage, underage, want, wantage
C’mon Goldy…give it up.
You should be focusing on what Gregoire should be cutting. Oooooooops, I forgot…for NW Progressives, there is no such thing as cuts! Only tax increases.
Good luck with your attempts at EXTORTION. I cannot wait to see what kind of con-job you, Gregoire and TEAM HORSEASS dream up.
PS—Any tax increase will fail.
Gregoire should have been cutting over a year ago. Layoffs should have happened and new hires frozen long ago.
Have you ever looked at the salaries, benefits and PAID time-off of State Employees??
You ought to soon be seeing that.
Salaries & Benefits should be rolled back to 2000 levels immediately. We are in a period of Deflation and economic suffering. Why should State Employees GAIN while taxpayers suffer????
I gave you my proposed list of cuts which would do it without a tax increase.
It can be done.
It’s just that the State Employees Union OWNS the Governor’s Office and the State Legislature…so it won’t be done.
What is that I hear????????????
The sound of the Chickens coming home to roost!
This budget crisis is not the result of overspending; the culprit in Washington, as in every other state in the union, is declining tax revenues. Gov. Gregoire did not create this shortfall… our crappy national economy did.
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A little disingenuous. Warnings of a growing credit and housing bubble were being sounded at least as far back as 2005. However, as long as times were good today people dismissed those sounding the alarm for tomorrow as Cassandras, or ignored them altogether.
The budget crisis here and elsewhere did not just sneak up on us. It is partly a failure of leadership and fiscal prudence. And discussions of whether we have a budget deficit today or projected revenue shortfall tomorrow totally miss the mark.
Goldy
As you know I have not been a fan of Gregoire. Now as a second term governor in the era of Obama she has a unique opportunity to show leadership.
If I were at her ear I would gather the State’s biggest names … Gates, Balmer, Bezos, Boeing, etc and have a confab on long term restructuring. Include the leg. leaders.
The result would be a reform proposal aimed at the long term. She might well get effed but her contribution of this passed would be something we could all be proud of.
SeattleJew–
WTF??
Another meeting?
Why should everything revolve around Microsoft?? F*ck Bill Gates…he is a silver spooner..his daddy was managing partner in Bogle & Gates and he was well funded. Hardly rags to riches. How can he relate to the average working stiff??
SJ, you have bought a “pig in a poke”..sorry about the pork reference.
Gregoire is a 39 year Career Bureaucrat…and you want her to somehow become a Leader??????
All of you KLOWNS seem determined to raise taxes and blame Bush for Gregoire increasing spending by over $8 BILLLION in 4 years.
John…you must be a State Employee or be married to one to say it is not a spending problem. It is also an overly costly regulation problem.
You are on the Titanic and only now see the tip of the iceberg. The Tax Increase will fail. People are more concerned about their own survival than overpaying a bunch of bureaucrats.
John…you must be a State Employee or be married to one to say it is not a spending problem. It is also an overly costly regulation problem.
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Read carefully. It was and is a spending problem because of the failure to anticipate and plan for the problem, which did not just sneak up on us.
Some past quotes from Goldy on this topic …
From 9/30/08: “For weeks I’ve been pushing the point that there is no state budget deficit.”
From the same post: “And the implied accusation that Gregoire has not been spending within our means is utter bullshit when she’s managed to sock away hundreds of millions of dollars of surplus.”
John–
You are right…I just read the 1st paragraph.
Sorry.
Gregoire had all the evidence in the world the recession was coming. She even publicly spewed that we must not overspend in Good Times…which is precisely what she did because the State Employees and State Teachers Union’s own her.
Roll back wages & benefits to the 2000 level immediately. State Employees have not suffered a lick. They are pampered and there are waaaaaaaay too many of them.
Let’s all get back to the Luddite mentality. They didn’t need a lot of government and lead simple lives.
I’m thankful for what I have and that I don’t long for a lot of frills…even though I can afford them.
People who took on a lot of debt…bad choice. Suffer consequences and re-build. That’s why we have Bankruptcy Laws.
only a total fool can’t see the state must cut back in wages and payroll – now – with no apologies
I voted for Chris – no easy solution – but – only one sure path
cut, cut, cut
If the unions don’t like it – fuck them – they will be lucky to have any paying job
Goldy,
Uhh, an income tax, with growing unemployment = less revenues…
It’s not really difficult to understand that if tax receipts are at 2002 levels, then spending thus should be at 2002 levels….
That means programs, salaries, benefits, etc have to contract…
On another related note
I wonder now if the UAW membership, given the choice of a job now (without healthcare for life, or retirement benefits) or no job at all, would vote for…..
Gee is Troll Dorky Moron?
Sure does parrot that fool’s style.
Near as I can figure Ramsey is criticizing Gregoire because, under our antiquated retail sales-based tax system, state revenues are shrinking as the nation teeters on the brink of an economic collapse not seen since the 1930s. Hey Bruce — maybe the solution is a state income tax. You know — tax the incomes of the people who took all the money during the so-called “boom” times and now aren’t spending or investing any of it. You know … the owners of the trillions of dollars now flooding into short-term Treasuries. Another fucking failure of trickle-down Whack-O-Nomics!
@13 The logical extension of your argument is that when public policy reverts to the 1880s (i.e., when Republicans are in power), people should live without indoor plumbing and use horses for transportation.
@1 There is no deficit and the state is sitting on a surplus. Those are true facts.
Unfortunately, the future outlook isn’t so rosy, but that’s not Gregoire’s fault. It wasn’t her economic policies that brought America to the brink of a replay of the 1930s. That idiocy and its consequences is a production of Stupid Republicans, Inc.
@2 Of course we have to reduce state services. First, let’s eliminate the state transportation and education subsidies to rural counties that haven’t been paying their own way.
@3 I think soaking the rich is a bad idea. Although how some people get rich is a social problem, being rich isn’t intrinsically bad. In any case, I’m against punitive taxation for any reason, because it creates economic disincentives and has a corrosive effect on the social fabric.
For this reason, we should end the punitive taxation of our state’s poor, and make up the revenue by requiring the rich to pay their fair share. Currently, Washington taxes the poor at more than 4 times the rate as the rich.
All I’m asking for is a flat-rate tax, a level playing field, equal treatment. Let’s eliminate the sales and B&O taxes, and replace them with a flat-rate income tax with no exemptions. That will keep tax rates low and, more importantly, equal for everyone.
@6 “Warnings of a growing credit and housing bubble were being sounded at least as far back as 2005.”
If so, the Republicans who controlled the White House and Congress did a lousy job of listening to those warnings, didn’t they?
Hey Bruce — maybe the solution is a state income tax.
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If this is the fiscally responsible, long-term solution . . . Gregoire hasn’t made it a priority. She certainly didn’t make it a central issue during the recent campaign when we had a looming budget problem.
If so, the Republicans who controlled the White House and Congress did a lousy job of listening to those warnings, didn’t they?
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A lot of people in positions of leadership at all levels of government – including the state level – and all political stripes ignored the warnings, or didn’t believe them.
@7 What exactly do you have in mind, SJ? Tax reform? We already have a study on that. The study says poor people pay 17% of their income in local/state taxes while affluent people pay only 4%, and recommended replacing the state sales and B&O taxes with a flat-rate state income tax to remedy that disparity. Government reform? If you want to cut state spending by 45% overnight, all you have to do is stop processing school funds through a state bureaucracy and let school districts collect the money directly, like all 49 other states do. Restructure state government? How? By combining agencies? Should prisons and transportation be under one executive? Would that save money? Should we consolidate unemployment insurances and injured workers compensation? Would this result in greater efficiency? Should we reduce the budget by eliminating functions that are wholly are largely federally funded, such as the vocational rehabilitation program or child support collection? Keep in mind, SJ, that the devil is in the details. I would submit that one of the least efficient operations of state government is conducting more studies to produce more reports of how to make state government more efficient, because we already know how to make state government efficient, and we’ve already done that.
@22 No, my friend, only the idiotic Republicans. Don’t try to pass this dog turd off on the Democrats by playing “we” games. There’s no “we” in this picture. Democrats were totally out of power, totally not listened to, and had nothing to do with this economic fiasco.
Troll is quoting Dori (total idiot) Monson:
Thanks but no thanks.
Dori has gone from a reasonable center-right to a far right wingnut. He insisted there were wmds in Iraq – wrong! He insisted that sound transit was terrible and the voters would never apporove it – wrong. He has never said a peep about Abramoff and republican corruption – I guess he loves the forced abortions and slave labor Ralph Reed and Grover Norquist (his two heroes) supported.
Ya, the Dori Monson has ZERO credibility except as a right wing nutjob. He supported McCain and went on and on about the “terrorist” asociations of Obama – just a bunch of lies from partisan Dori.
The few times they let me on the radio – Dori cuts me off cause he is too much of a coward to debate.
Dori loves to give his diatribes but has NO facts to back them up. Oh, the scandalous 33% increase over 4 years – that is less than 8% a year and how much has the population grown and the federal mandates grown? And where did we start 4 years ago – at a low point.
Has there been profligate spending -ummmNO. But Dori likes to sensationalize the real facts.
Where would Dori cut? I would start with his program – oops, KIRO has already done that. Maybe we should cut unemployment for blowhards from right wing talk radio?
There’s no “we” in this picture. The Democrats were totally out of power, were totally not listened to, and had nothing to do with any of this shit.
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But there is a we in this picture. If the warnings are being sounded and you choose to ignore them than you have responsibility for that. It’s a different issue from who caused the problem.
@21 And she won’t, because it’s a political loser, thanks to the obstructionist conservative elements of Washington’s social fabric who profit from piling the local/state tax burden on the backs of the poor.
In the face of complete and total catastrophic melt-down of western style free market systems, state and local lawmakers are, and will be, pathetically helpless against the carnage poised to smash them against the jagged shoreline of fate.
And God help anyone who listens to, or blogs Flappy Gumson.
@13 RS, pretty much any tax = less revenue during an epic economic collapse (such as that induced by a Republican administration in 1929, or the one created by another Republican administration in 2008).
@28 One of the most appalling stories I’ve read about the Great Depression involved a New York city worker who couldn’t pay his property taxes because the city hadn’t paid his wages for over a year, so the city seized his home for nonpayment of property taxes.
Those kinds of stories are about to be dragged out of old trunks, dusted off and a modern patina applied. It’s the time between the death of the old paradigm and the birth of the new one that sucks the most.
In these stressful times, consumers need all the morale-boosters they can get, so here’s a warm and fuzzy story from today’s fishwrapper: It’s reported that a co-pilot on a transatlantic flight went nuts over mid-ocean, had to be forcibly removed from the cockpit, and then a stewardess helped the pilot land the jetliner in Ireland after cabin attendants asked the passengers if anyone had flying experience and no one came forward. Seriously, I’m not making this up.
Rog–
It was Air Canada–
You know, Canada with the Socialized Medicine you KLOWNS all seem to want.
This is what happens with socialized medicine.
It’s great if you have a slight cough…but serious medical or mental problems,,, no help.
Seven states have no state income tax: Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming. Two others, New Hampshire and Tennessee, tax only dividend and interest income.
But revenue from Income Taxes would decline just as much as the revenue from Sales Taxes and Property Taxes. So I’m really not sure what your point is. Is it that we need an income tax in addition do the sales and property taxes at the same rates we currently have? How about increasing corperate taxes?
Well $5.1 billion sure sounds like a lot, except the current two-year general fund budget is $33.6 billion. Not wonderful, but survivable when you consider that this forecast is based on October – which is when the pause button was pressed on the economy. If you really think the economy won’t recover some over the next few months, you must be very young or have been asleep over the last few decades.
We should put solar panels on all buildings and put large cardboard boxes over businesses and households that refuse to pay taxes.
Does anyone have some links to back up the argument that ‘we’re taxing an ever shrinking share of the economy?’ Don’t get me wrong, i guarantee i’ll agree, I just don’t really wanna spend all day sifting through DOR reports and legislative worksession pdf’s when somebody there obviously has all that shit super handy.
With deflation in full force, costs will drop for the state. Somehow that doesn’t seem to make it into some of these forcasts. Just today, they warned us about cost increases for the 520 replacement because “Mostly, the increasing price tags are due to rising costs of materials, especially concrete and steel, he said.” WTF?!?
Maybe they should read The Australian –
CHINA’S $900 billion stimulus package will not rescue the steel industry from its decline, with one analyst listing all steel stocks as a sell.
In a report on the Australian steel sector, Citigroup says it is “forecasting global steel demand to decline through 2010”.
Given that it’s highly unlikely that the State Legislature is going to develop any major redesign of the State’s tax structure in the coming session, the reality is that a balanced budget must be adopted before July 1.
The Governor, as required by law, will submit a balanced budget that includes no changes in law — i.e., no tax changes; the negotiated collective bargaining agreements (no legal option there either); and a list of specific and generic budget cuts that will probably have minimal impact on K-12, prisons and the State Patrol, thus focusing cuts on health and human services, environmental programs and the like.
Having observed this blog for awhile, I would further wager that every regular poster will then scream in protest because they don’t like the specific cuts, while not offering anything substantive in their place.
So here’s a few suggestions to try and get a real discussion going:
The legislature won’t fund the collective bargaining agreements. Don’t build the Secretary of State’s Heritage Center building (the GA building will last awhile longer, surely?) Limit the capital budget to really critical safety projects like bridge repairs, and postpone acquiring wildlife preserves and natural areas and parks. The state has an incredible number of specialized funds that can only be used for one narrow purpose – if those were consolidated the funds could be directed to the higher priorities. Change the percentage that state employees pay for health insurance from 12% to 20%, maybe 25%.
And if we want to alter the role of government, rather than just trim around the edges to get through a tough fiscal patch, how about: stop incarcerating people for drug use (poor use of limited prison space), and consider whether we should be partially replacing our foster care system with an orphanage-type structure where kids could be safely housed, counselled and provided a social community, rather than the increasingly risky choice of placing them with individuals who then need to be constantly checked up on by overwhelmed social services staff?
Alex
Oh how are all the Sound Transit projection dollars piling up from that 1/2% sales tax increase, when no one is buying shit….
Gotta love it. Might get 10 more feet of it at this rate!