March 23, 2007

Dear friends and neighbors,

It was my hope going into the 2007 session that a fiscally responsible operating budget could be written. What do I mean by fiscally responsible?

We should take a sizable portion of the state's $2 billion surplus and put it into a constitutionally-protected rainy day savings account. That’s important because our state’s economy is very cyclical.

When the economy is good, we enjoy revenue surpluses such as the one that exists today. However, when the economy dips, incoming state revenue also falls because people are not spending as much.

With a rainy day fund, we can help to stabilize our revenue stream and protect taxpayers from future tax increases.

I was also hoping that we would have a fiscally responsible budget that would pay down the unfunded liability in our state’s pension system. In past years, the state has skipped payments and failed to meet its pension obligations. Historic under-funding has created a $5.7 billion gap in Plan 1 of the public employees' and teachers' retirement systems. With a budget surplus, the most fiscally responsible thing to do is pay our bills before spending money on new programs.

I was also hoping that we could get back to the Priorities of Government and reinstate the voter-approved I-601 spending limit to restrain spending.

Now let’s take a look at the operating budget proposal rolled out this week by the majority party. Unfortunately, it is anything but fiscally responsible.
Here’s why:

House Budget Facts

• Amount put in rainy-day fund: $0
• Percentage of spending increase under Gov. Gregoire: 33%
• Percentage of spending increase over original 2005-07 proposal: 18%
• Amount of policy adds (expanded government): $2.2 billion
• Expected deficit under this spending plan in two years: $2 billion

• It spends nearly every dime – a total of $33-point-4 billion dollars.
  That’s record spending. In fact, it’s an 18 percent increase in spending over the current year’s budget.
• It adds $2-point-2 billion dollars of new government policy programs.
• It spends $1.3 billion dollars more than we will take in.
• It moves money around into other accounts to circumvent the spending limit.
• It will turn a $2 billion dollar surplus into a $2 billion dollar deficit within the next two to three years.
• It provides no money for a secure rainy day fund for emergencies. That means taxpayers are not protected under this budget.
• This budget does little to address our unfunded liability of the state’s pension system.
• It creates large bow-wave costs into the future that we will not be able to pay for with existing revenue.

In short, this is an unsustainable, irresponsible budget that panders to the tax SPENDERS and sticks it to the tax PAYERS. As someone told me the other day, something is wrong in Olympia when all the big special interest groups have smiles on their faces while the folks back home are worried about their pocketbooks.

This budget will be up for a vote on the House floor on Monday, June 26. I will be voting NO!

I am honored this week to host Katie Fergus as a page in the Washington House of Representatives. Katie is a sophomore at Okanogan High School.

We have a great page program in the Legislature involving young people between the ages of 14 and 16. Paging presents students with a unique educational opportunity to participate in the legislative process. Their duties vary from ceremonial tasks, such as presenting the flags, to operational chores like distributing amendments during legislative sessions.

Pages spend a week in Olympia and usually stay with a host family. They also get paid for their services.

Katie is the 15-year-old daughter of Gary and Brenda Stevens, Okanogan.

If you know of someone who would like to become a page, please contact my office in Olympia. For more information about the legislative page program, visit: http://www.leg.wa.gov/House/PageInternProgram.