Free Republic

Revenue forecast exceeds original I-601 spending limitsOLYMPIA—It was announced today that forecasted revenue for the 2003-05 and 2005-07 biennia is projected to increase by $815 million. This does not include $313 million of the tax increases approved by the legislature last session and dedicated off budget to fund I-728 (class size reduction) and I-732 (teacher salary increase). The $815 million revenue increase means that for both biennia, forecasted revenue exceeds the original I-601 spending limits adopted by the state expenditure limit committee last November. Expenditures, however, exceed forecasted revenue for both biennia. Budget Outlook (All dollars in millions)   2003-05...

OLYMPIA—The Evergreen Freedom Foundation (EFF) today filed a lawsuit asking the Washington Supreme Court to protect the voters’ right to file a referendum on legislative actions, as guaranteed by the state constitution. In the last days of the recent legislative session, lawmakers passed SB 6078. The measure overturned I-601—the voter-approved initiative that limited government spending and required a two-thirds vote in both houses to raise taxes. Last week the Washington Farm Bureau filed for a referendum that would put the issue back before voters in the next general election. The Secretary of State’s Office, however, refused to accept the referendum...

Feeling restricted by having to budget within a voter-approved spending limit? Tired of having to follow the will of the people? Worry no more! Now you too can be a contestant on the latest craze to hit Washington’s legislature: Budget Shell Games 101. It’s easy to play. First thing you do is roll the 2005 supplemental budget into next biennium’s (2005-07) operating budget while not providing any details about the supplemental. This may help dissuade the curious from learning about your budget slight of hand. Then you pray that no one takes the time to read line-by-line the fund shifts...

The Democratic controlled 2005 legislative session will definitely not be remembered as one that respected the will of the people. In just four short months of one-party control in Olympia, Democrats managed to amend no less than four initiatives passed by the people. Averaging one altered people's initiative a month, it's a good thing session ended when it did. Left by the wayside of the Democrats' 2005 tax-and-spend express are Initiatives134, I-402, the promises of I-728 (I-884), and the granddaddy of them all—I-601. Passed in 1992, I-134 was the people's attempt to reign in the campaign contributions of corporations and...

OLYMPIA—Not withstanding the current tax debate, tomorrow Washingtonians will finally reach their Tax Freedom Day for 2005. This means that from January 1 to April 20 (110 days), taxpayers in Washington have been working to pay their combined federal, state and local tax obligations. Tax Freedom Day for 2004 arrived on April 18, meaning Washingtonians had to work an additional two days this year to pay their taxes. The national average for Tax Freedom Day arrived on April 17, three days earlier than in Washington this year. Each year the Tax Foundation calculates the date by which taxpayers will finally...

Voter-approved spending limit all but eliminated OLYMPIA—Governor Christine Gregoire signed SB 6078 today, amending the voter-approved I-601 spending limit. The bill removes the 2/3 vote requirement for the legislature to raise taxes during the 2005-07 biennium and redefines the spending limit growth factor to allow state spending to grow at a faster pace than previously authorized. The House passed SB 6078 on April 15, the same day federal income taxes were due. The Senate approved the bill on April 16. Today’s bill signing was required for Democrats to be able to raise taxes with a simple majority vote. “Today Democrats...

Our state government has seized the reins of spending from voter hands and the budgetary cart is out of control. Over the past month, the Legislature has willfully overridden voter-mandated spending constraints, presented a budget that veils the severity of the spending problem while mortgaging our future and has refused to submit to independent audits of this crazy spending spree. The Legislature voted along party lines to set aside the requirement of voter-approved Initiative 601 that tax increases be approved by a supermajority of legislators for the 2005-07 biennium. This is an encore presentation of what they did for the...

Columnist George Skelton’s enthusiasm for ‘Live Within Our Means’ should lay to rest any notion the measure would reform anything. I always appreciate having my opinions validated by the Los Angeles Times. Two weeks ago I wrote about the governor’s endorsement of the “California Live Within Our Means” spending-control initiative, pointing out that said measure was toothless, riddled with loopholes, and totally inadequate for the job of controlling state spending. Monday of this week George Skelton, the liberal Times columnist (pardon the redundancy) who covers Sacramento, strongly endorsed the measure. Case closed. To my knowledge Skelton has never met a...

OLYMPIA—The Senate Democrats introduced a $26 billion 2005-07 budget today which ignores the voter-approved I-601 spending limit. The $2.8 billion spending increase over the current budget (12 percent increase) includes $482 million in tax increases. The Senate proposal exceeds the current I-601 spending limit by $900 million and the governor's proposed 2005-07 spending limit by $122 million. "Based on the Governor's and the Senate's budget proposals, it appears the Democrats are unwilling to budget based on a priorities of government model," said Jason Mercier, budget analyst for the Evergreen Freedom Foundation. "Rather than use performance-based budgeting, Democrats are repeating their...

Budget gimmicks used to raise spending limitOLYMPIA—At a March 24 House Appropriations hearing on Governor Gregoire's 2005 "emergency" supplemental budget, Rep. Eileen Cody (D) acknowledged that Democrats were pursuing budget gimmicks in order to artificially increase the voter-approved I-601 spending limit.In Gregoire's $219 million 2005 "emergency" supplemental budget, the governor transfers $45 million from the general fund to the Health Services Account. But Gregoire then plans to transfer $86 million from the Health Services Account to the general fund in her 2005-07 budget. This budget shell game artificially increases the I-601 spending limit. This means that the people will not...

Governor Christine Gregoire has chosen not to proceed with former Governor Locke's widely acclaimed priorities of government (POG) budget model. Instead Gregoire drafted a $25.8 billion budget for 2005-07 that sets up serious fiscal problems for the 2007-09 budget, and which she herself calls "unsustainable." Forecasted revenue for the 2005-07 budget is projected to be $1.7 billion higher than the current biennium. But Gregoire's 2005-07 budget proposal increases spending by $2.6 billion (including her requested 2005 $219 million "emergency" supplemental budget). This increase is more than three-times the expected rate of inflation. Expenditures (All dollars in millions) 2003-05 (current) $23,246...

OLYMPIA—Today Governor Christine Gregoire released a self-proclaimed "unsustainable budget." Despite saying she "produced a no-new taxes budget," Gregoire requests tax increases of $203 million (cigarette and partial reinstatement of the estate tax previously thrown out by the state Supreme Court). Not mentioned at her press conference are her plans to increase spending for the current budget by $219 million. This $219 million 2005 spending increase combined with her 2005-07 budget request means Gregoire hopes to increase state spending by $2.6 billion or more than three times the rate of inflation. To reach her record spending level of $25.8 billion, however,...

If you're not already angry at what Olympia is trying to get away with, you will be by the time you're done reading this column. Let's start with some recent headlines: ``Forecast jumps by $739 million, but Democrats say tax increase still likely'' (King County Journal) ``New Figures Shrink State Shortfall by a Third; the bad news: Gap is still about $1.5 billion'' (Seattle Times) And then this in the Seattle P.I.: ``The new forecast cut the projected shortfall from $2.2 billion to $1.5 billion'' Shortfalls? Short of what, exactly? Gaps? A gap between what, precisely? Here, in straight, clear...

Contrary to the belief of some state officials, the voter approved I-601 spending limit is still in effect. This has ramifications on the budget proposal Governor Christine Gregoire will release on Monday, March 21, at 10 a.m. Based on the $25,721 million forecasted revenue for the 2005-07 budget (includes $836 million 2003-05 ending-fund balance) and the $25,107 million voter approved I-601 spending limit law, Gregoire's budget proposal will fall into one of the four following scenarios: 1) Gregoire's budget will be balanced within forecasted revenue and the state's I-601 spending limit. This will mean that NO tax increase of any...

Now that Washington's state spending limit (I-601) and November revenue forecast have been adopted, the budget picture is coming into focus for 2005-07. The good news is that with inflation up only 3.7 percent for 2005-07, the forecasted revenue is projected to increase by 6.7 percent—an increase of more than $1.5 billion over expected revenue for the current biennium (2003-05). It is worth remembering that in 2003 Governor Gary Locke presented just one budget based on his Priorities of Government (POG) budget review. Unfortunately, unlike in 2003, Locke may now be presenting two budgets for the next governor to inherit....

<p>Gov. Schwarzenegger kicked off his campaign today for Props. 57 and 58 – his $15 billion bond measure and the new budget reserve requirement that accompanies it. We figured, based on his previous statements, that the governor would put the best face on Prop. 58, describing it as the equivalent of “tearing up the credit card” even though its balanced budget requirement has enough loopholes to drive a Hummer-sized deficit through. But the first press release from the campaign also said the proposal would limit the growth in state spending to “no more than the growth in the state’s economy.” I’m not a big fan of formula-driven spending limits, but that statement is simply untrue. The measure includes no such provision. Schwarzenegger proposed a spending limit last fall but then agreed to a reserve requirement without one – the measure that eventually became Proposition 58. I asked Todd Harris, the campaign spokesman, about this distortion. Via email, Harris responded that the measure limits spending “by not allowing borrowing.” Aside from the fact that Schwarzenegger’s measure does not prohibit all borrowing, even a real prohibition on borrowing would not be a spending limit. At best, the governor could claim that his measure leaves intact the state’s existing Gann spending limit, but that limit has been amended so many times with exceptions that it is widely seen as irrelevant at this point.</p>

Ironically, California has had a constitutional spending cap — little known and of little effect — for nearly a quarter of a century. Experience with the existing limit illustrates that capping state spending is far easier said than done. The Gann limit, named after anti-tax crusader Paul Gann, said state spending could grow no faster than the rate of inflation and population growth. The cap was approved by voters. But over the years, subsequent voters approved a string of new ballot measures that created holes in the limit. Now, with Schwarzenegger's proposal, the state may come full circle, back to...

For Schwarzenegger, sources said, the closed-door sessions became another lesson in just how limited his options will be in addressing the budget crisis if he is to keep his campaign promises to repeal a recent tripling of the state vehicle license fee, avoid tax increases and still not disturb education programs long championed by the governor-elect. The sessions took place only hours after another private meeting in which about a dozen economists told Arduin that California's gradually recovering economy is unlikely to grow quickly enough over the next 18 months to dig the state out of its continuing fiscal crisis....