Posted on 04/24/2007 1:53:10 PM PDT by truth49
If you want an example of what not to do when creating a budget, look no further than the $30 billion-plus budget adopted by the legislature this session.
The budget violates the most basic premise of creating any financial plan: don’t spend more than you expect to make. The legislature’s spending knowingly exceeds forecasted revenue by nearly $1.3 billion. This excessive spending results in substantial projected deficits for future biennia.
Majority Democrats are embarking on a grand experiment of “faith-based budgeting.” They have decided the expert economists must be wrong and that the economy will continue to outpace historic and projected growth. This is their first great leap of faith.
Democrats also shifted around nearly $500 million in their supplemental budget plan for 2007 to drive the spending cap upward. Rep. Helen Sommers (D-36), chief architect of the House budget, was astonishingly honest about the budget gimmick, saying it was necessary to give lawmakers enough spending authority to cover desired programs.
These budget games show apparent indifference to a pending state Supreme Court ruling, expected any day. In 2006, a Snohomish County Superior Court determined it was illegal to shift funds between accounts for the sole purpose of raising the spending cap.
Shifting funds between accounts to circumvent the spending cap is a game that should not be tolerated, especially in light of a superior court ruling that has already deemed the maneuver illegal. If legislators don’t like the spending limit, they should repeal it and face voters on the decision.
Democratic leaders chose to go ahead with continued fudging of the spending limit, apparently on faith that the Supreme Court decision will go their way. Should the outcome defy their expectations, the current budget’s legality and spending levels will be called into question.
Lawmakers are also parading their faith that the billions they “invest” in the budget will actually deliver meaningful performance. The 500-page appropriation bill for the most part reads like a laundry list of ways to spend money, without identifying returns taxpayers can expect. Absent measurable performance outcomes, there is no way to determine if the programs actually deliver the results for which they were created.
Legislators blatantly violated the Priorities of Government budget process by not answering the key questions POG requires: What are the results expected from government? What strategies are most effective in achieving those results? How should we prioritize spending to buy the activities that are most critical to implementing these strategies?
Lawmakers cannot expect programs to deliver results when performance criteria by which to measure outcomes are not provided.
The budget also ignores some harsh realities for which no faith is needed. Credit Suisse, an investment banking firm, estimates Washington’s unfunded liabilities for retiree healthcare, life insurance, disability and additional retiree benefits other than pensions to be more than $10 billion. This is the first year the state will be required to identify these monstrous liabilities.
Unfunded liabilities for pensions have also seen an eight-fold increase over the last five years, from $778 million to $6.4 billion.
Rather than alleviating some of these obligations, the legislature used the surplus to create new ones.
The budget is a barefaced violation of the Priorities of Government process which legislators claim to follow. Democrats failed to prioritize spending or limit spending within the revenue forecast.
Budgets should never be adopted based on faith. Creating a budget centered on the expectation of revenue not forecasted will increase the likelihood that painful spending cuts or tax increases will be necessary when the revenue doesn’t materialize.
Those who voted for the budget proposal should pledge to taxpayers that they will not resort to tax increases to bail themselves out of the $1.3 billion self-inflicted deficit created by their spending. The Democrats’ faith-based budget will likely leave taxpayers facing a spiritual meltdown once economic reality sets in.
Cut their salaries 10% every year they over spend the budget and cut federal taxes by 30%. Then freeze state taxes. Get rid of any and all excise taxes.....these are just double taxation methods to raise more money.
Gregoire and company are taking Washington State down the road to bankruptcy but they could care less.
WA ping
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