We released a detailed analysis (pdf) of the Governor's 2009-11 budget proposal today. It approaches the budget from the standpoint of how it measures up against four widely shared values: Education and Opportunity, Thriving Communities, Healthy People and Environment, and Economic Security.
The graph above is from the report and shows the percentage cuts in each of these budget areas. Health care and economic security would take significant hits, including:
- Cutting tens of thousands of people from state-funded health insurance programs and lowering benefits for many others.
- Eliminating cash and medical assistance to adults who cannot work due to disability.
- Terminating benefits for some families receiving temporary assistance.
Not only does this reverse the progress we have made in these areas recently, but it couldn't come at a worse time given the economy.
But don't think education is exempt; outside of basic education, the K-12 budget would be cut by 28 percent. These are programs that are designed to update our schools for the new economy, to attract and retain the best teachers, and to close the achievement gap for lower income students and students of color.
In short, it's a budget that takes a step in the wrong direction.
For more information on the four values listed above, see the Progress Index.
A decade ago, I was the primary author of the annual survey on hunger and homelessness published by the US Conference of Mayors. During the intervening years, there have been significant new efforts to reduce homelessness in America. Cities, counties, and states have adopted 10-year plans to significantly decrease or eliminate homelessness. There was wide agreement that we all need public supports and services that provide avenues to economic security.
Washington State has a statutory goal of reducing homelessness by 50% by 2015. As part of this 10-year plan the state has made significant investments towards that goal including doubling the size of the Housing Trust Fund and towards helping offenders that are being released from jails and prisons transition into the community without ending up homeless.
This plan (and the complementary plans of cities and counties across the state) are apparently not a priority now. That's the message one would infer from the budget that the Governor submitted. Half-way through our ten-year plans have we decided that the goal of ending homelessness is no longer of value?
After much progress, the Governor's budget undermines this goal by proposing cuts in mental health coverage for adults who don't qualify for Medicaid, reducing transitional housing funding for offenders reentering community settings, reducing the investment in the housing trust fund by 50%, and eliminating cash assistance and medical coupons to disabled adults who can't work.
Homelessness is already on the rise in cities across the nation. According to a report by the Center on Budget and Policy Priorities, a fall 2008 survey of 22 cities found 16 showed an increase in homeless families with children. In another national survey, one in five responding school districts reported having more homeless children in the fall of 2008 than over the course of the entire 2007-2008 school year.
Is this the future we want for our cities and hometowns here in Washington? Now more than ever, the state should invest in reducing homelessness through public supports and services that provide economic security and pathways out of poverty.
The Governor's budget (released last month) proposes deep cuts to the state budget that would limit our ability to pursue public investments in health, economic security, and education.
The stark proposal is in response to a large budget deficit. In part, this deficit is the product of the economic crisis. But, as the attached graph shows, the economy is only part of the story. The ability of the state tax structure to pay for normal growth in government spending has been deteriorating for over a decade.
This graph follows the standard of showing budget amounts as a share of total personal income. This provides insight on the resources we have to fund public investments and also recognizes that the cost of government grows along with economic and demographic trends.
The purple line shows that revenue has been eroding since long before the recent economic downturn. It’s a combination of significant tax cuts, spending limitations, and a tax system that doesn’t grow along with the economy even during good times. So while the current fiscal crisis has obviously been exacerbated by the economic crisis, it’s a longer-term problem.
The green line shows spending trends. Up to now, the state has been able to use reserves and stopgaps to hold spending a little steadier than our revenue stream, but we’re out of reserves now and are facing the largest deficit since the 1980s.
The budget cuts proposed by the Governor (shown here by the dashed green line) would be the largest, relative to the economy, in over a decade.
So what does that mean for Washington? Can a budget of this size truly reflect our values and move our state in the right direction?
As the state economy faces historically large deficits and lawmakers scramble to figure out how to balance the budget, Tim Eyman is proposing a new voter initiative designed to limit to the rate of inflation the amount of revenue state and local governments can take in. Any additional funds coming into the government would go directly to reducing property taxes.
To read the full text of the Lower Property Tax Initiative, go here.
Brad Shannon, political editor at The Olympian, points out on his Politics Blog, that the timing of the initiative is probably not a coincidence. "I'm guessing the measure is timed to lock in the soon-to-be reduced size of state and local governments, which are shedding payrolls and costs due to the ongoing recession," Shannon writes. "In Thurston County, losses of sales tax and other revenues are leading to large layoffs of staff, for instance, and Gov. Chris Gregoire has proposed some $3 billion in reduced program outlays. In 2010 and beyond, revenues are likely to spring back, allowing cut programs to be restored, unless lawmakers cut taxes or Eyman's measure succeeds."
For more information see our report on sound property tax policy for the state.
The Governor’s 2009-11 budget released today proposes deep cuts in all areas of the state budget, including state-funded health care, assistance to people with disabilities, and education. The Governor’s reliance on budget cuts and resistance to options of increasing revenue and ending certain tax exemptions severely limits our ability to pursue important priorities during these difficult economic times.
During a time of broad economic insecurity, the impact of these budget reductions will fall disproportionately on lower income people who are employed or are unable to work due to disability. Twenty percent of the $3.4 billion in cuts in the Governor’s budget focus on two important programs:
- The General Assistance for the Unemployable Program provides health care and cash assistance to 20,000 adults who are unable to work because of disability. This program is entirely eliminated, saving $400 million.
- Currently, about 100,000 people receive health insurance through the Basic Health program. The governor’s budget would cut this program by 42%, suggesting that 40,000 or more people would lose health insurance. This cut in Basic Health would mean a reduction of $275 million dollars
The starting point for a conversation about how to close the state's $6 billion deficit will come tomorrow as Governor Gregoire unveils a 2009-11 budget proposal that will likely include dramatic cuts in the areas of human services, health care, education, and higher education.
These are difficult times for our state and our nation. In the midst of economic uncertainty, state government can play an important role in protecting families and creating opportunities for a better tomorrow. As job losses rise, more people in our state will need unemployment benefits and state-funded health insurance in order to meet basic needs. Our community colleges must be affordable so that people can access workforce training programs. And state initiatives can provide needed jobs and boost economic security for families while also making important investments in state infrastructure.
While a weak economy increases the need for government protections and services, it also can significantly reduce the revenue that allows the pursuit of those priorities. There is no easy answer to a $6 billion problem, but the process of developing and passing a balanced budget must include consideration of all available options, including raising revenue through tax increases and closing tax exemptions.
Now is not the time to turn away from investing in our long term efforts to create a just and prosperous Washington State. We must work together towards a shared vision in which there is education and opportunity, thriving communities, good health and a safe environment, and economic security for everyone. With the economy in peril, our state needs bold action and leadership in order to make progress towards these important goals.
We will release a detailed analysis of the Governor's budget proposal in early January.