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OPINION: Solution to budget
'crisis' lies in reforms, not taxes
By Rep. Doug Ericksen
You’re going to hear a lot
about an enormous state budget shortfall during the 2005 legislative
session. By some estimates, the state is facing a $1.8 billion deficit.
That’s a big number, but it’s important that we put it into context.
Here are the facts:
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The state will have
more money to spend in the next budget; not less.
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There will be enough
tax revenue collected in the next biennium to increase spending $1.6
billion.
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That means the state
can increase spending by 7 percent over the next two years without
raising a single nickel in new taxes.
Those who claim we’re starting this budget $1.8 billion in the hole
are assuming that we need a 13 percent increase in spending over the
next two years. Most households and businesses would not
characterize that as a crisis.
This state budget will
have its challenges. But the problems are not in the numbers. They’re in
the policies that dictate how the taxpayers’ money is spent. The
“shortfall” is created, in part, by the assumption that we must continue
to do things the way we always have.
Whenever requests for
government spending exceed the amount of money available to pay for
them, there are two ways for lawmakers to respond: We can raise taxes –
as some Democrats are already proposing – or we can look at structural
reforms that bring costs down and improve the delivery of services.
For example, health care
costs are expected to increase substantially in the next biennium.
Lawmakers could raise taxes to pay for them, or we could consider
reforms that will help control those rising costs and get at the causes
of runaway health care inflation. There are meaningful reforms many of
us support, such as the creation of health savings accounts, easing
mandates on insurance plans, and bringing escalating medical malpractice
premiums under control. These are substantive ideas that will help us
stretch our health care dollars.
Without these kinds of
fundamental changes, there will be a crisis every year and every year
some will be calling for 13 percent increases in state spending. In
Olympia, there are those who attempt to create a crisis to force
legislators to vote for a tax increase, when in reality, the real crisis
lies in the way we continue to run government.
In her inaugural address,
the acting governor talked about a laundry list of new and expanded
programs on her agenda - each with a considerable price tag that would
add billions in new spending. But she made no mention of how to pay for
them. Democrats, who control both chambers of the Legislature, have yet
to lay out their budget plans, but introduced legislation in the first
week of the 2005 session to raise taxes by nearly $600 million.
Too often, government does
not seem bound by the economic realities that families and businesses
face. When you and I encounter difficult times, we have to tighten our
belts or work harder to pay the bills. For government, higher taxes are
the quick and easy answer.
What’s really needed are
structural changes in the way we deliver and pay for things such as
health care and education. We need bureaucratic reforms so that we
improve the way we drive money out of Olympia to the people who make the
best use of it. We need to reduce the mandates that we place on local
governments and schools, and let our local elected officials do their
jobs.
As I have been doing for
the past six years, I will be offering and supporting solutions to
prioritize spending, address structural problems in government, and
empower our local elected officials.
I support a strong
statutory spending limit and a constitutional rainy-day fund that will
provide a cushion against the need for tax increases during economic
downturns.
Until then, we will be caught in the torrents of boom-and-bust budget
cycles. Just like we saw in the early ’90s, when double-digit spending
was followed by the largest tax increase in state history.
I am ready to support
common sense solutions to the issues that we face. I also am prepared to
fight proposals that will lead to massive expansions of government and
large tax increases year after year.
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For more information, contact:
John
Handy, Assistant Director: (360) 786-5758
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