Governor’s Budget: A Reality-Based Proposal

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Governor’s Budget: A Reality-Based Proposal

By - December 18, 2012

The budget released this morning by Governor Gregoire acknowledges that it takes new resources to grow our economy and comply with our court-ordered mandate to fund basic education. This balanced approach puts us on a sustainable path towards creating jobs and prosperity for all Washingtonians. Without revenue, policymakers will be faced with making new job-threatening deep cuts to all other areas of state investments. 

The Governor’s proposal addresses a $900 million gap between our current needs and resources, and invests $1 billion in basic education. As the graph illustrates, the budget includes a mix of savings, reductions, transfers, and new taxes.  A few highlights include:

  • Repeal of tax breaks: $131 million in new revenue from the repeal of sales tax breaks on purchases of candy and gum, and eliminating a tax break on fuel used by oil refineries and lumber mills.
  • Extension of current taxes: $636 million in revenue from the extension of surtaxes on beer companies and service-industry businesses that were enacted in 2010.
  • New taxes: $424 million in resources from new taxes on soda and fuel sold at wholesale from oil refineries and distributors.
  • Health care savings: $140 million in savings from the expansion of Medicaid, which will provide over 250,000 more people with health coverage.
  • Suspension of previously-enacted policies: $384 million in cuts from the suspension of previously-enacted policies, including Initiative 732, which provides salary increases for teachers.

Governor pie 2013-15

As required by law, the Governor also put out a budget with no new revenue. The “Book One” budget is a stark example of how to fail at meeting Washington state’s needs by refusing to include revenue. If adopted, this budget would keep our state mired in a recession. It is clear that a budget without revenue is unsustainable and it is dangerous to our economy and our future. Under this scenario, the state would:

  • Eliminate food assistance for over 11,000 people.
  • Eliminate assistance for over 1,000 people who care for family members with developmental disabilities.
  • Cut over $50 million from our public universities and colleges, leading to further tuition increases.

We are just a few short weeks away from the beginning of the legislative session and the inauguration of Governor-elect Inslee. Legislators and the new governor should follow Governor Gregoire’s example and make sure that new resources are an ingredient in future budget proposals.