Budget deficit or surplus?

Evergreen Freedom Foundation ^ | 10-14-04 | Jason Mercier & Bob Williams

[truth49]

The billion dollar question facing Washingtonians for the 2005-07 budget is whether or not Initiative 601's (I-601) remaining spending restrictions escape further weakening or outright repeal by state officials. Under current state law, Washington is forecasted to have a budget surplus of approximately $193 million. Forecasted revenue for 2005-07 is expected to be nearly $1.7 billion more than was available for the 2003-05 budget (a seven percent increase).

This means that if the governor and legislature follow the Priorities of Government budget model (POG) that was used to develop the 2003-05 budget, they will prioritize spending within the I-601 spending limit and within forecasted revenue.

However, state policy makers are currently planning to spend more that the state is forecasted to collect for 2005-07, resorting back to the broken pre-POG budget system of focusing on inputs and more money (i.e. taking the current budget and adding caseload and inflationary increases). This results in a projected $1.3 billion deficit.

This level of "deficit" spending would break the I-601 expenditure limit by $1.5 billion. To reach the projected 2005-07 spending level, I-601 will have to be significantly altered or eliminated. With a $193 million surplus under current law, it appears the only reason for eliminating I-601 would be to increase taxes.

Major factors contributing to the $1.3 billion "deficit" include: $502 million for planned cost of living increases (COLAs) for state employees (including I-732 teacher COLAs, vendor increases, and home health care workers); an additional $440 million for state pension contributions; and $371 million for state employee health insurance coverage, including K-12 employees.

[rudypoot]

They better increase spending to balance the books. /sarcasm