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The choice in Olympia: Pretty budget or real budget

Post by TNT Editorial Board / The News Tribune on March 17, 2012 at 6:05 pm |
March 16, 2012 6:13 pm

This editorial will appear in tomorrow’s print edition.

We’d love to see a happy compromise between the budget-writers of the state Senate and House, who’ve come up with starkly different spending plans to carry the state government through the end of the biennium.

But if forced to choose between the two supplemental budgets, we’ll take the Senate’s – specifically, the amended version announced Thursday.

There’s a lot to dislike in that plan, which cleared the Senate after Republicans and three maverick “Road Kill” Democrats pulled a surprise maneuver on the chamber’s Democratic leadership. Their budget pares back a slew of humane social services, including subsidized medical coverage for many poor Washingtonians who aren’t covered by Medicaid.

The House budget has only one glaring shortcoming, but it’s a whopper. It spends more money than the state has, and it sets the Legislature up for yet another gargantuan deficit when it returns to Olympia next January.

The Senate budget embodies hard, unpopular choices – even brutal choices – that promise to bring spending into line with expected revenues.

The House budget is wonderfully generous by comparison. Unfortunately, that generosity is financed with Monopoly money. The key flaw is a creative accounting move that would borrow $330 million from the next biennium to pay for public school expenses in this biennium.

The Democrats who defend that approach say it’s a simple matter of delaying the checks by a day. Sounds innocuous. But that one-day delay amounts to a legal check-kiting scheme. Its only purpose is to let the Legislature evade its obligation to write a budget that balances revenues with expenditures within a given biennium.

Washington’s Democratic treasurer, Jim McIntire, has called the deferred payment proposal a “felony gimmick” that would draw the attention of the Wall Street firms that rate the risk of government bonds. Credit downgrades can be very expensive, and Moody’s and Fitch already have Washington on their watch lists. This is not a good time for lawmakers to adopt the fiscal practices of a banana republic.

The Senate’s approach has other advantages over the House’s.

It would, for example, repeal initiatives 728 and 732, which were supposed to guarantee smaller class sizes and pay raises for teachers. But these 2002 measures came with no funding to pay for the guarantees. They’ve proven unaffordable, and they now build an automatic deficit into every new budget cycle.

It would also phase out early retirement subsidies for state employees, another item that contributes to chronic budget shortfalls.

The Senate budget’s chief virtue is that it’s connected to reality in a way the House budget isn’t. Reality can be bitter medicine, but it’s time for the Legislature to drink up.

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