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SJR 8222 Unwise Without Additional Reforms

Posted by kimj at Mar 30, 2012 01:55 PM |
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Part One in Series on Long-Term Fiscal Challenges

To responsibly maintain essential investments in education, health care and other vital public priorities, policymakers should adhere to budgeting practices that result in adequate, sustainable, and equitable budgets.

Senate Joint Resolution 8222 (SJR 8222) proposes a more disciplined and long-term budgeting structure by amending the State Constitution to require the Legislature to balance the state budget over a four-year period instead of the current two-year cycle.

Policymakers should abide by long-term, disciplined budgeting practices. However, as written, SJR 8222 would do more harm than good because it fails to address reforms that are central to responsible budgeting.

Responsible and sustainable budgeting requires policymakers to have all tools at their disposal. This means they must have the ability to address both the revenue and spending sides of the ledger and to review all forms of spending as part of the budget process. Yet, policymakers do not currently have these tools available to them:

  • There are onerous requirements to raise revenue: Current budget-making is hamstrung by the stipulation that revenue increases only be enacted with a supermajority (two-thirds) vote of the Legislature or a public referendum. Spending cuts, however, can be enacted with a simple majority. This dynamic undermines rational decision-making and allows a minority of lawmakers to obstruct a key component of a balanced budget.
  • Tax expenditures are exempt from the budget process: There are hundreds of special tax breaks for businesses and individuals that go unchecked each year. Even though tax breaks have the same impact on the state budget as other forms of spending, their costs are not considered alongside other priorities as the budget is being developed. This incomplete view of state spending has led to billions of dollars in cuts to direct spending on health care and education since the start of the recession. During the same period, spending on narrow tax breaks has remained virtually untouched.

Without the ability to address Washington’s structural revenue problems, SJR 8222 would pigeonhole lawmakers into a lopsided budget approach that relies heavily on more cuts to core public priorities.

This is the first post in a series of analyses on Washington's long-term fiscal challenges.

Stay tuned to schmudget.

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