There are dueling editorials in Seattle’s two dailies today regarding the projected $3.2 billion revenue deficit facing budget writers in the next biennium. And if you’ve ever wondered why it’s necessary to have two dailies, well, this is a great example.
The Seattle Times leads off by intentionally misinforming their readers:
AFTER the deficit in the next state budget increased by $529 million Thursday, Gov. Christine Gregoire called on her director of finance to suggest $200 million in immediate cuts. It was a good move, if late.
Yeah, thanks for the backhanded compliment Frank, but as I’ve previously explained, there is no state budget deficit. You can call it a “budget deficit” if you want, but that doesn’t make it so, and technically, you are absoposilutely wrong.
Had current revenues during this current biennium fallen below budgeted expenditures, that would have constituted a budget deficit. But they haven’t. In fact, we are still generating a small surplus. What the Times is referring to is a revenue forecast that would project a deficit in the next budget should spending continue to grow at its current rate, which it won’t, because the state is constitutionally prohibited from running deficits.
The governor blamed the shortfall on the disaster in Wall Street and, by implication, on the Bush administration. That was not altogether convincing.
You know what I don’t find all that convincing? An editorial page that routinely misleads its readers… you know, like the time you guys lauded Sweden for repealing their estate tax, without bothering to mention that they replaced it with a 1.5% annual wealth tax. Or, you know, like when you label a revenue forecast a “budget deficit” when you know that it isn’t.
Whatever the cause of the Wall Street crisis — and we think most of the blame is in the private sector — some kind of economic downturn would have happened eventually, and Gregoire’s budget was not ready for it.
And eventually, our Sun will exhaust its supply of hydrogen, swell up into a red giant, and swallow the earth. But that doesn’t stop me from planting a garden.
The point is, the governor could have let state spending continue to shrink as a percentage of our economy, socking away a few billion dollars for a rainy day… though the last time we tried that, Tim Eyman used the surplus as ammunition to pass his tax-cutting I-695. Or, we could spend the money when have it, and then not spend so much when we don’t. The latter option makes writing the 2010-11 budget more difficult, but in the meanwhile, class sizes have been reduced and tens of thousands of children have been given access to health care.
The rest of the Times editorial is filled with self-righteous I told you so’s and meaningless blah-blah-blah’s. So let’s move on to the Seattle P-I, which offers a more concise, accurate and thoughtful approach to the issue.
Beware of the new TV ads that blame Gov. Chris Gregoire for the state’s deficit; it’s a story more complicated than a 30-second hit will allow.
Damn straight. And apparently, a story more complicated than the rival Times is willing to tell.
The most important thing to know is that state spending is not the problem. We’re spending less as a percentage of personal income than we did a decade ago. But Washington does have a revenue problem. As the Washington State Budget and Policy Center wrote last February: “These problems are not new, nor will they go away without addressing the structural deficits embedded in our revenue system. As it stands, the state is not able to raise enough funds to keep up with state spending, which is largely in line with past budgets as a share of the economy.”
Oh my gosh! A newspaper editorial that relies on actual facts instead of Republican talking points! As I’ve repeatedly pointed out, state spending as a percentage of the economy (the only measure academics will tell you that really matters), has remained relatively flat in recent years. In fact, the last time I checked, over the past decade, state and local spending combined has declined from 11.2 percent of personal income to about 10.3 percent.
But you won’t read about facts like that in the Times editorial, because it interferes with their opinion.
The P-I concludes:
A shrinking economy makes the revenue picture worse. But the state’s education, social services and health care programs are more important — essential — during an economic crisis.
Yes, yes, yes! The real question facing voters this November is not whether the next budget will be balanced, but rather, who do you trust to make the tough choices necessary to balance the budget while representing the values and priorities of the majority of voters.
Gov. Gregoire is the the pro-child candidate, and she’ll work hard to protect the needs of our children. Dino Rossi is the pro-business candidate, and he’ll work hard to protect the priorities of his corporate sponsors. Gov. Gregoire is the pro-environment candidate, and she’ll fight to maintain environmental regulations, enforcement and clean-up. Dino Rossi is the pro-BIAW candidate, and he’ll fight to gut these programs.
What we have is a structural revenue deficit that has been masked in recent years by a booming economy, and that’s something, sadly, I don’t have faith will be addressed by either candidate. But when it comes to spending priorities, I have total trust in Gov. Gregoire.
I sincerely hope you cling to this semantic argument through election day. When planned spending exceeds forecasted revenue by $3.2 billion, you have a major problem. Your answer is to complain about people labelling this a “deficit” and suggest it is entirely a revenue problem when state spending went up 33% in the last four years. If this is the best you’ve got then you and your Queen are fucked.
asshole @1,
I often acknowledge that I am forced to argue issues from a rhetorical disadvantage… but that doesn’t make the facts any less, um, factual.
This is not a budget deficit, and you are intentionally misstating reality when you claim that “planned spending exceeds forecasted revenue.” The 2010-11 budget hasn’t been written, and so it is misleading to state that this spending has been “planned.” Perhaps that’s smart politics, but it is not honest. And while I expect Rossi and his surrogates to lie in their ads, I think we should all expect better from the Seattle Times.
Let’s see how the trolls rationalize their delight with the Times pushing the Rossi line with the fact that Fairview Fannie also endorsed Obama yesterday.
Is any Liberal still subscribng to the Seatle Times???
Cancel it NOW! Not tomorrow, not next week, or simply not renewing your subscription.
Cancel now and tell them why!
If you continue giving Frank Blethen money for blathering on about his political views, then you are rewarding him in a way that encourages him to continue.
OK Goldy…let’s put it this way:
Gregoire has created a “Budget Trainwreck”!
How’s that?
When you increase spending by $8 BILLION in the face of a recession and declining revenue, no matter how you want to semantically frame it, we can hopefully agree on one thing:
Goldy, Gregoire flat out admitted her spending increases were NOT SUSTAINABLE
What does that tell you Goldy?
It’s called creating a BUDGET TRAINWRECK!
So now your excuse is upcoming Budget is not written yet??
GREGOIRE HAS A $3.2 BILLION and growing shortfall Goldy. WTF! Doesn’t she have some specific areas she will cut if she is not “currently” (because there is an election) considering any tax increases??
WTF Goldy.
You must feel like such a chump trying to defend the indefensible.
Or perhaps one of the characteristics of the Goldy/Gregoire TEAM HORSESASS is a total lack of pride.
Gregoire’s TEAM HORSESASS seems to believe voters will simply “trust her” to fix the huge budget mess she created with overspending.
TEAM HORSESASS also totally ignores the massive shortfall in the State Retirement Fund…probably another $8-9 BILLION with equity & real estate declines.
Do you really think voters will buy it’s all Bush’s fault and none of the overspending decisions by Gregoire has had even a smidgeon to do with this??
Good luck with that dawg argument dawg!
Mr. Cynical.
Where’s your outrage against Republicans??
The year is 2000 and the US has a Federal surplus of nearly $300 billion dollars and Clinton has been paying own the National Debt that stood at $4 trillion dollars.
Now, we have $500 billion deficit and $11.3 trillion dollars in debt.
All on the Republican watch. Every dime of the nearly $8 Trillion dollars in new debt was caused by Republicans. Ronald Reagan fiscal conservatives.
Reaganomics = fiscal treason.
And, you get all bent about a “projected” deficit that most likely won’t even happen???
You’re intellectually bankrupt on this issue.
How are your stocks? I’m pure cash in short-term CD’s waiting for a bottom. Too much instability for me.
Goldy, I could not agree more with your post. The Times is just setting the table for their endorsement of Rossi. No big shock there.
Voters who think they want a tool like Rossi as Governor in tough times need to do some real study between now and when they vote.
Our state is in for a short down cycle and a total shift in policy from a Governor who has invested wisely in good times to a guy who is vested in nothing the state is doing, will lead to drastic slashes in programs and initiatives and lead to scrapped investments. This is not what is needed to balance the budget but this is how Rossi will pay back his owners at BIAW. Look for ecology to be hit the hardest. Rossi will slash their budget so any ability to regulate vanishes by the end of spring 2009. Dino has long been a champion of less regulation and it is his brand of, look the other way government, that got our nation in the mess we are in now.
What we need is a steady hand. We need a skilled negotiator who has the trust of those who will see tough cuts, a leader who will not tackle this challenge with reckless abandon. Our state is on the right track. We just need to slow down the progress while the next federal administration digs our nation out of the mess GW Bush has put us in.
Brilliant post, Goldy. This and your previous post on the so-called “deficit” are your best work of the year.
Cynical and all the other GOP trolls can’t get around the cold truth that Gregoire, faced with a revenue shortfall, will cut spending to match available revenues BECAUSE THE LAW REQUIRES IT!
There is no “deficit” because in this state a deficit IS AGAINST THE LAW!
Rossi would balance the budget on the backs of working people. He has already tried to do it. The son of a bitch put a head tax on NURSING HOME PATIENTS, for shit’s sake!
Gregoire nailed him on it in the debate. She said “these are not our values.”
Let’s see Rossi and his army of orcs try to defend taxing people in nursing homes.
GBS spews:
“Mr. Cynical.
Where’s your outrage against Republicans??”
I am and have been outraged at Bush and the Democratic-controlled Congress.
Fiscal boneheadedness is a bipartisan characteristic.
Besides you know I’m a Conservative!
I made a ton of money last week on NOV & GE.
Did you see my post??
I’m only in Wells Fargo.
I sold 2,000 of my shares late Friday and I’m still holding 2,000 that’s it.
I’m way over $100K of ST Capital Gains this year.
That part sucks…
35% TAX.
But, better than losing money like Rog did.
All the rest of my powder is dry!
ivan spews:
Cynical and all the other GOP trolls can’t get around the cold truth that Gregoire, faced with a revenue shortfall, will cut spending to match available revenues BECAUSE THE LAW REQUIRES IT!
Ummmm, ivan…how in the heck can you promise whe will cut expenses? You know darn well she can and will raise taxes & fees!
I’m not arguing that the Budget must “balance” in the end.
But you know there are many “shell-games” like continuing to underfund the State Retirement Fund like Gregoire has done in the past to in essence mortgage our future to avoid making cuts in spending.
It’s a shell-game.
ivan, aren’t you concerned about an $8-9 BILLION underfunded State Retirement Fund??
If not, why not?
I think the Dems should be sued for the smoke-and-mirrors
Goldy,
1. You are at a rhetorical disadvantage because you are trying to argue around the facts staring you in the face:
a. Your candidate is the incumbent.
b. Our state is facing a huge revenue shortfall.
c. She has spent lavishly, raised taxes as much as possible and done so in a manner that (your pedantics aside) will extend into next years budget.
Would that it were that we lived in a world with zero baseline budgeting where every year each program was zeroed out and was scrutinized on its worth and value to the state. We dont. So your braying about “there is no spending planned for next year” shows why you are flaying the dead horse of the “its not a deficit” canard is because you really have nothing substantive to say and/or don’t understand state budgeting 101.
This may also suggest you are at a rhetorical disadvantage because you aren’t very good at being a partisan brawler — when in a bind you make shit up. Like last week when a mere day after you called McKenna a “water-boy” for BIAW he files charges against them for PDC violations.
PS But please keep going on this tangent because it is transparently pathetic and keeps you from focusing on issues that might have some relevance to swing voters.
Where getting nowhere on this deficit issue and the state of our local economy.
How about this if no one won last Governors election and everything stayed in place as it was in Olympia on that Nov. day.
We wouldn’t be in the mess we are today!
Stick this in your illegal pipe and smoke it.
Once again – see my spew to your first post on this – Gregoire HERSELF calls it a “deficit.” Give it up!
To Mr. Cynical:
Twice in this string you’ve hyperventilated over the “$8-9 billion underfunded in state pensions” as if that should cause all of us to not vote for Chris Gregoire. Get your facts straight!
First, you’ve nearly doubled the amount of the Unfunded Accumulated Actuarial Liability as reported by the Office of the State Actuary. Second, that unfunded liability is only appropriate to the Plan 1 systems (in which the state took over the deby created by local government give aways). Third, the entire state pension system (all plan tiers) is 99% fully funded.
You can read all about it in the latest Actuarial Valuation at: “>http://osa.leg.wa.gov/Actuaria.....07_AVR.pdf (See page 14 of the pdf, or page 6 Section 1 of the printed report).
Finally, since 1977, the state has had a plan in place to pay off the unfunded liability it accepted when it took over the financially strapped local government plans. When you look at how Sen. Rossi balanced the budget in 2003-05 with (fee increases, but) no tax increases, you will find that he suspended payments on the unfunded pension liability for two full years. Meaning the funds not only didn’t gain the state’s payments, they also were then unable to earn investment earnings off those funds for two full years. Upon her election, Governor Gregoire resumed payments towards the state’s unfunded pension liabilities and has us back on the path towards the original pay off date of 2024. Of course, the cost is now higher due to Rossi’s budget “shell games,” but at least the state is back in the good graces of the bond houses that would loan us money.
This resumption of paying the cost of state pensions is a large percentage of the “increase in spending” you so lament. So, I’m guessing you think the best way to restrain spending is to not pay your bills, and that it is irresponsible spending to resume paying the bills your predecessor left for you……
Does Goldy not understand that it’s a PROJECTED budget deficit? Why does he keep leaving out the word projected?
16. Budget Wonk spews:
To Mr. Cynical:
Twice in this string you’ve hyperventilated over the “$8-9 billion underfunded in state pensions” as if that should cause all of us to not vote for Chris Gregoire. Get your facts straight!
First, you’ve nearly doubled the amount of the Unfunded Accumulated Actuarial Liability as reported by the Office of the State Actuary.
Budget Wonk–
The last Unfunded Liability you are referring to was 6/30/07….15 months ago.
The Fund has $38 BILLION invested in equities which have dropped dramatically the past 15 months…in the 15% range.
The Actuarial Projections assume a positive return.
So if the actuaries projected a positive return and the markets went down, are you saying you believe the Unfunded Liability has miraculously gotten smaller????
My Ass it has.
Why can’t we get an interim report of the Unfunded Liability @ 6/30/08???
I’ll tell you why–
Because the Unfunded Liability is now probably $8-9 BILLION!!!
I have shared facts that lead me to my conclusion.
You question my numbers using 15 month old information? How convenient.
Gregoire will make sure the projected Unfunded Pension Liability information is not released until AFTER THE ELECTION.
Another case of hiding bad news.
Thanks for responding though.
Get us those interim numbers, would ya!
Oh and PS–
The Fund also has huge real estate holdings.
Do you think those valuations have also increased??
Report back when you have some interim numbers.
Until they are released, it is reasonable to assume the Unfunded Liability has climbed dramatically from the $5.1 BILLION reported on 6/30/07.
Is this going to be yet another major fiscal item that Governor Gregoire will get back to us on AFTER the election? Thought so.
Budget wonk spews:
“This resumption of paying the cost of state pensions is a large percentage of the “increase in spending” you so lament.”
Sir, I do not consider paying your obligations to be “increased spending”.
Your attitude is precisely why Washington State is in the dire financial straights it is.
Unfunded Pension Liabilities are a form of getting around the need for a “balanced budget”.
Smoke-and-mirrors…leave the problem to someone else.
So now you blame Rossi for this???
Gary Locke signed those Budgets BW…and the Dem-controlled House pushed them too.
Why is nothing connected to this Budget Trainwreck the fault of the Democrats???
Hard to believe….but keep trying the denial of responsibility tact. People are sick of it.
Mr. Cynical;
At the risk of continuing a conversation with someone who fights the facts… You are right, ex-Governor Locke deserves every bit as much blame as Sen. Rossi for failing to make required contributions to the pension system. They both, effectively chose to borrow money from the pension funds at 8% (the assumed rate of return on investment) by not paying the then current costs for the system so they wouldn’t have to make real budget cuts elsewhere.
As for the unfunded liability, I challenge you to find any newer information as what I cited was the most current. This is not something Gov. Gregoire is hiding! This is the report that was recently audited (by contracted outside actuaries)in accordance with state law. There is always a lag in the data and reporting as the books from the prior year need to be cleared before the valuation and audit can begin. The latter process takes a number of months to complete and the books on fiscal year 2008 just closed July 1. The actuary follows a statutorily prescribed timeline in providing this information, and no one is “hiding bad news” until after the election. The next valuation – good through 6/30/08 will be due in September of 2009. Oh by the way, the Actuary works for the legislature, not the Governor.
I agree, paying your obligations should not be considered “increased spending.” However, you cite the growth in overall state spending and attribute that to some measure of spending recklessness on behalf of the incumbent. The fact that the prior administration – with Sen. Rossi’s complicity – didn’t pay their obligations clearly suppressed the level of spending in the prior period (making the increase appear larger) and the fact that Governor Gregoire resumed paying those legal obligations is responsible management and yet raised the overall state expenditures in her budgets.
These costs are in the hundreds of millions of dollars, so this discussion is quite material to your suggestions, “when you increase spending by $8 billion…”
There is a truth in pension finance that you can either pay now, or pay more later. Unfortunately, due to the Locke/Rossi budget Governor Gregoire had no choice but to pay more later. This is what good public managers do and is likely one of the many reasons Governing Magazine proclaimed our Governor as one of its Public Officials of the Year in 2007.
BW spews:
“The next valuation – good through 6/30/08 will be due in September of 2009.”
You are telling us there are no numbers until 15 months after the valuation date??
Show me where that time-line is prescribed.
The 6/30/07 numbers came out many months ago.
The big problem I have is Gregoire creating a politically motivated Rainy Day Fund when we have such a huge unfunded liability. Seems a bit shallow..don’t you think?
The analogy is have an extra buck in your pocket and calling it a Rainy Day Fund when you owe $10. Shell-game we can debate ad infinitum….but it is mighty shallow & political.
So is increasing spending when you know it is not sustainable. Gregoire actually said the right thing…then turned around & did precisely the opposite wrong thing.
Now she must be held accountable.
Thank you Budget Wonk!
Readers would do well to learn from your posts and the facts you site while blocking out the BS being falsly pitched by the Cynical one.
Getting our state back on track in terms of paying back the loan is just one small example of how differently Rossi and our Gov would address a projected shortfall. For Rossi its all about smoke and deception.
Gregoire is the only responsible choice for the people of our state.
PM–
Gag me with a fork.
You credit Gregoire with paying back a loan when she increases spending almost 33% in 4 years???
Have you increased your spending by 33% in 4 years PM??
The vast majority of people have not, I can assure you.
While average taxpayers are tightening their belt, Gregoire goes on a wild, unsustainable overspending spree in the face of a recession.
Keep spinning KLOWNS!
Goldy, you’re to Gregoire as Muhammed Saeed al-Sahaf is to Saddam Hussein.
There’s no deficit here! Everything is just fine!
And I love how you give us the bullshit that “The most important thing to know is that state spending is not the problem” is a fact. No, it’s not, unless you want to call Gregoire a liar: she said in 2006 State of the State that we cannot increase spending by a lot during good times, because it will hurt us in bad times.
And by any measurement, that is precisely what she did anyway by increasing the budget by 33 percent.
This absolutely is a spending problem, and if you were remotely honest you would recognize the fact that what Gregoire said in 2006 is different from what she’s saying now.
The real question facing voters this November is not whether the next budget will be balanced, but rather, who do you trust to make the tough choices necessary to balance the budget while representing the values and priorities of the majority of voters.
This is, of course, code for “who do you trust to redistribute wealth?” And there is no doubt that if you want wealth redistribution — which will, by the way, result in fewer and more poorly paying jobs — then Gregoire and the Democrats are the way to go.
Because why bother earning money and providing for yourself when you can just have Christine do it for you?
Gov. Gregoire is the the pro-child candidate
… who allows SSOSA to continue to exist?
And you are, of course, implying that she is any more pro-child than Rossi, which is a bald-faced lie.
Dino Rossi is the pro-business candidate, and he’ll work hard to protect the priorities of his corporate sponsors.
And you are, of course, implying Gregoire will work any less hard to protect the priorities of HER corporate sponsors, such as the tribes and unions, which is also a bald-faced lie.
Gov. Gregoire is the pro-environment candidate, and she’ll fight to maintain environmental regulations, enforcement and clean-up. Dino Rossi is the pro-BIAW candidate, and he’ll fight to gut these programs.
Lie about Rossi, of course. And lie of omission abotu Gregoire: she is the pro-tribes candidate who helps ensure that they don’t have to follow those programs.
What we have is a structural revenue deficit that has been masked in recent years by a booming economy
A booming economy that, according to Gregoire’s current argument, was the result of the policies of George W. Bush, by the way.
And as I already showed, no, even Gregoire admitted on multiple occasions that we have to prepare for the coming slowdowns by NOT spending as much as we can, IN ORDER TO AVOID raising taxes.
And now you’re saying that the fact that she spent so much is evidence that we NEED to raise taxes. So you’re saying Gregoire is a liar, I guess.
But when it comes to spending priorities, I have total trust in Gov. Gregoire.
Because you believe in wealth redistribution, better known to some of us as “theft.”
Actually it appears it’s the P.I. that is misinformed and printing little white ones. You can ignore that $3.2 BILLION figure all you want, but wishful thinking and willful ignorance will not change anything. My bet is most of the Happy Hooligans here at HA are afraid they may lose their gov’t cheese and extended unemployment benefits (YLB) when Dino is in charge, and hence may actually have to work for a living (gasp!!). How frightful!
Look at the facts and see the light PEOPLE! BIAW donated funds towards Rossi because they believe in him, you’d do the same thing if you felt strongly about a candidate. I’m tired of everyone bashing BIAW for standing up for their rights! Everyone is pissed because BIAW gave money to the BEST candidate! Gregoire isn’t focused on the issues and is more concerned about BIAW when she should be concerned about WA! BIAW has done no wrong. GREGORIE TOOK MONEY FROM THE UNIONS, what is the difference? THE UNIONS OWN GREGORIE! I’m so sick of all this BIAW bullshit! Grow up people it is an election, get over BIAW, they have done NO WRONG!
Indeed, in their own minds and in the minds of their rabid followers, the commie-fascists at the BIAW have done no wrong.