Do-It-Yourself Budget Balancing

by Pia K. Hansen


That the state of Washington has a budget problem is hardly news to anyone. Earlier this year, higher education was sliced by $54 million, more than 400 government positions were cut and a long list of smaller state programs simply seized to exist -- all in an effort to make up for a $1.6 billion deficit. The next budgetary session doesn't look a lot brighter.


"We'll definitely be facing another budgetary deficit situation; it's possible we'll be looking at as much as $1 billion," says Senator Lisa Brown (D-Spokane), who also chairs the Senate's Ways and Means Committee, which is responsible for the state budget.


What is news to many is that the legislature is ready and willing to listen to constituents across the state before heading into the next budget session. On Wednesday, Brown is hosting a budget workshop at the downtown library. No, wait -- it's not boring, it's a hands-on presentation where participants get to mess with the state budget to their heart's content. Always wanted more money for public schools? Here's the chance to present your idea. Don't want to see any more cuts in youth programs? Come on down and explain why. Want to show the legislature how to do the job? Pen and paper will be provided.


"It's a very brief presentation: here's where the money goes now, and here's where it comes from," says Brown. "We are going to focus on the general fund budget. That's basically the operating budget; it covers higher education, health care, human services and prisons, but it's not the capital budget, the money we spend on buildings and such. This is not the money that goes to transportation, either -- people are going to be voting on that transportation package this fall anyhow."


Non-partisan staffers from the Senate Ways and Means Committee's office have prepared a series of budget worksheets, listing a number of budget cuts to choose from, how much they'll save the state if implemented and what some of the consequences of each separate cut would be.


"We did this workshop with the readers of the Seattle Times earlier this year," says Mike Wills of the Ways and Means office. "Basically, we are going to follow the same format in Spokane."


The worksheets outline the state's $23 billion two-year budget and the problem: a $1.6 billion deficit. Of the general fund, 43.5 percent goes to cover public schools, 32.5 percent goes to human services, 12.3 percent goes to higher education and 2.6 percent to governmental operations.


The general fund gets 51.2 percent of its funding from the state sales tax, 18.2 percent from the business and occupation tax and 12 percent from property taxes and the state school levy, just to mention a few of the larger sources.





So now that you know where you stand, it's time for the real fun to begin. Following are some of the options The Seattle Times readers were presented with.


Instead of going through the budget item by item, you can choose to cut budgets across the board. A 1 percent cut will save you $87 million.


State employees are scheduled to receive a 2.6 percent cost-of-living increase. Cut that and save almost $50 million. If you want to get real tough, you could cut salaries by 5 percent at the same time -- that would save you an additional $100 million.


Here's a good one: you could quit providing Medicaid to undocumented immigrants. That would save you $21 million.


Or how about cutting the Basic Health Plan? You'd save $45 million with a 10 percent cut. While you're at it, you could save $33 million by not reimbursing hospitals that provide acute care for uninsured people.


No one said it this was going to be easy.


There is of course another way of balancing the budget: you could increase the revenue side.


The state has a $384 million reserve that could be used to fill some budgetary gaps -- but that requires a two-thirds vote of the legislature. How much would you spend? Half? One third? All? It still wouldn't be enough.


By lifting some restrictions on gambling and non-tribal casinos, it's estimated that the state could make about $100 million. This only works if you don't have a problem with gambling.


Or you could raise the sales tax. Every additional 0.1 percent equals almost $100 million in increased revenue every year -- but it's doubtful that the business community would appreciate this solution.


And there's always the sacred cow of all sacred cows: personal income tax. Just 1 percent would result in almost $1.4 billion in new revenue. Better call Tim Eyman before you go this route.


Put a tax on candy and chewing gum and you could make $14 million.


Put sales tax on newspapers and the state could make an extra $3.2 million.


The list goes on and on.


"We're telling people here are the options on how to fill the gap," says Brown. "Then they get to make the decisions."


What makes these workshops so interesting -- and sometimes confrontational -- is that people approach the budget with very different opinions about what's necessary and what's not.


Take Lance Morehouse, for instance. He is the coordinator of the Spokane County Parent Coalition and an advocate for people with disabilities.


"I did the workshop last year, and it was very good -- very interesting," says Morehouse. "I mean, it was hard. We got the worksheets and then we were divided into small groups and we had to agree on the changes we were proposing. People had very different opinions."


He's not shy about his partiality going into this year's workshop.


"My bias is to protect human services," says Morehouse. "I am coming at it with an open mind, but I do have a family member with multiple disabilities and I know the realities of how these cuts can hit people hard."


Some people do the workshop because they want to be informed about the upcoming budget decisions.


"I want to be informed before going into the next session," says Randy Hyatt, owner of the North Central Care Center and vice president of the Washington Health Care Association. "I'm on the board of this PAC and we represent about 260 nursing homes and a little more than that number of assisted living facilities. I spend a lot of time in Olympia during the [legislative] session."


It's the first time Hyatt is doing this workshop. He says the nursing home business relies heavily on state dollars, and he wants to get a firsthand look at what's going on with the budget.


"The majority of our revenue is Medicaid dollars, which is state money, so my world is very budget-sensitive," says Hyatt. "These are tough choices. The clich & eacute; I used in Olympia last year was 'Since when are roads more important than our elderly?' But the fact is there's not enough money to go around. I believe it's my job as a citizen to try to come up with some solutions."


He says the workshop is going to make it easier for people to understand the choices the legislature is faced with, because they've been there.


"You know, we'd love to have people from DSHS come out and walk a day in our shoes, or for the governor to come in and be a nurse's aide for a day," says Hyatt. "This gives us a chance to kind of put the shoe on the other foot and see where the legislators are coming from."





It's not just Washington that's facing a budget crisis. At the ongoing meeting of the National Governor's Association (NGA) in Boise, Idaho, governors from across the nation are sharing the pain. Sales tax revenue is down, capital gains are down because reserves are being emptied and a plummeting stock market isn't helping. The NGA estimates that 45 states are reporting budget shortfalls -- and unlike the federal government, states must balance their budgets.


"For the past year, the governors have been in the unfamiliar territory of declining tax revenues, spiraling health care costs and a slowing economy," said governor of Michigan and NGA chairman John Engler in a statement when the meeting opened on Saturday. "It has been challenging to maintain our commitment to important programs like education in these tough economic times."


So what's going to happen to all the ideas coming out of Wednesday's workshop?


"We are going to take them back to Olympia," says Brown. "Hopefully, they'll be helpful for me, but we're also going to share them with other legislators."