Dear Friends and Neighbors,
I have two pieces of news. The first you may have already heard about: the governor has called the Legislature into a 30-day special session beginning Nov. 28. I'm glad she recognizes the urgency of addressing the new $1.4 billion shortfall, and I'm hopeful we can use the time wisely to implement real reforms in government.
The second piece of news is that I have a new legislative assistant. My previous assistant, Jen, was promoted within our staff to work on agriculture policy issues. I know Jen will serve us well in that position. My new assistant is Sharon Trask. Sharon has experience in county court systems in both Arizona and Washington, and worked as a legal assistant in the Attorney General's Office. In addition, she brings private sector experience to the job, having run two family-owned businesses in the Olympia area since 2007. I am glad to have Sharon working with us in the Second District.
A couple weeks ago I sent you a chart describing the state's revenue and spending history. This time, I want to provide you more detail.
Where does the money come from?
We depend heavily on consumers with the sales tax, on employers with the business and occupation tax, and on homeowners with the real estate excise tax. There has also been a decline in real estate tax revenues, caused by the collapse of residential and commercial sales. What's alarming to me is the growth we are seeing in “other taxes and fees.” We already have indications that user fees are failing to fill the gap as expected. In addition, it's one more burden on struggling families.
Where does the money go?
As you can see in the chart above, education and health care/human services make up the largest components of our budget. As you know, I support the Washington State constitution as it prescribes that education must be the “paramount duty” of the state.
In 2009, levy equalization was at risk of being drastically reduced. Levy equalization balances education funding for property-poor (rural) districts with smaller tax bases. I agree with the House Republicans who fought for hours during a late-night debate to ensure this funding was kept intact, and succeeded. I believe the state should keep basic education funding intact, as well as equal funding for all students – regardless of whether they live in Roy or in Seattle.
I'm very concerned with the increase in debt service costs. This is a result of issuing additional bonds to finance state projects. The difference in debt service payments between the 2005-07 budget and the 2009-11 budget is about $600 million. This represents about one-third of the shortfall we'll be dealing with in the special session.
I would love to know what you think about the information I'm providing. Does it make sense to you? Does it answer your questions about our budget situation, or lead to more questions? Is there a better way for me to examine the budget? E-mail me.
At the end of the month I'll address where specifically the state has reduced spending, and how it has affected average people and the efficiency of government services.
I hope you find these updates useful and informative, and that you will forward them on to your friends and neighbors for them to subscribe.
It's an honor to serve you.