Inslee’s budget proposal – ‘Whistling in the dark’
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or the first time since taking office, Gov. Jay Inslee has proposed a budget for 2018 that complies with the state’s four-year balanced-budget law. But there are big problems with how he gets there, and it is unlikely that his proposal can win passage in the Legislature. Opposition won’t just come from Republicans – it can be expected from members of his own party.
The challenge: Lawmakers in 2018 are charged with writing a supplemental budget that will adjust the $43.7 billion budget for 2017-19, which was adopted by the Legislature last session. After the Legislature adjourned in 2017, new revenue forecasts projected approximately $1 billion in additional tax collections. Meanwhile, the Supreme Court is claiming the ability to issue orders to the Legislature – a constitutional overreach. It wants the Legislature to speed up the spending timetable for its “McCleary” plan for the public schools. Finishing a year early would cost about $1 billion.
Inslee’s plan depends on two very difficult votes. To make his numbers work, Inslee plans on taking $476 million from the state’s ‘Rainy Day Fund,’ the constitutionally established fund that is intended to be tapped in cases of extreme financial emergency. This requires a 60 percent “yes” vote and the cooperation of both parties. Inslee’s proposal also depends on a new tax on energy, which his fellow Democrats have repeatedly rebuffed in the past.
Rainy-day spending is inappropriate. The fund was created for cases of genuine emergency, not for artificial crises created by Supreme Court rulings. The state constitution clearly gives the Legislature the authority to set the state budget, not the courts. Existing unrestricted reserves and the continuing extraordinary growth of state revenues should be sufficient to cover education expenses that the Legislature, not the court, deems necessary.
Energy taxes face well-founded opposition. Inslee has revealed no detail about his proposed energy tax, except that he intends to generate $1.5 billion in 2017-19. Similar proposals in the past have gotten nowhere in the Legislature, and for good reason. Energy taxes would drive up the cost of motor fuel and electricity, imposing a huge burden on struggling families. Higher costs also would make it more difficult for business to create new jobs and maintain existing employment, and would also make Washington less competitive against other states. Lawmakers generally have been unenthusiastic about top-down schemes to reorder the state’s economy with higher taxes, particularly when there is little evidence of environmental benefit. The state House, controlled by Democrats, has refused to consider Inslee’s previous proposals.
‘Sustainability’ depends on an energy tax. Inslee’s proposal complies with the state’s four-year balanced-budget law only because it includes the problematic energy tax. The balanced-budget law requires lawmakers to balance spending and taxes over the next two state budgets, rather than just one. This important safeguard has ended the Legislature’s habit of launching spending programs today that will force tax increases in the future. During previous periods of Democratic control, this irresponsible budgeting practice caused shortfalls year after year. If the energy tax is not approved, and nothing takes its place, Inslee’s budget is not sustainable and will require lawmakers to pass additional taxes in the future.