Dear Friends and Neighbors,
In my last e-mail to you, I promised a review of where specifically the state has reduced spending, how it has affected average people and what has happened to the efficiency of government services. After several months of studying information organized much differently than is usual in government, I feel strongly about the conclusions that seem inescapable from the numbers.
One thing that I am doing differently is looking at ALL state spending combined. A great deal of state activity has been moved out of the general fund. Once that happens, it gets less attention and scrutiny from the press and the Legislature.
You have probably heard uninformed claims that the state's current level of spending is catastrophically reduced. However, today's level of spending is well above the level of 2000. Spending actually peaked in 2009 when the Legislature approved dramatic increases, far above the previous trend, partly with the help of federal government stimulus funds. In other words, as was done in Washington D.C., we failed to adjust to the new reality. Yes, compared to those years of undisciplined spending, we have seen a decrease, because that level of spending was unsustainable. Now the Legislature is forced to cut back, but only to levels that seemed acceptable as recently as 2005.
Some have said if you look at total spending adjusted for inflation, the state is spending less than 1980's era levels. Again, we ran the numbers, and total spending has actually more than doubled since the 80s, and is on par with the overall trend from the last 30 years.
You have probably read in the papers that state employee numbers have fallen drastically and that the state has spent much less on payroll in the last couple of years. While it's true that the number of state employee positions is down 4 percent, I believe you have to look at all the spending, not just general fund spending.
While it's true general fund spending on payroll has decreased, the total payroll for the state is still increasing, as shown in the top line of the chart. In fact, it's increased more than $3 billion just since 2000, which means payroll costs have grown more than 61 percent. For example, while natural resources funding from the state general fund has decreased, new fees were created and existing fees increased. The result is higher costs for park and outdoors users, while the agencies see about the same level of funding as in previous years. They have simply substituted fees for general fund dollars without becoming more efficient or less costly.
Whenever we hear about cuts, we wonder how it will affect us and the services people need. I took a look at direct services and compensation. I think compensation is a worthwhile indicator of government overhead. We defined direct services as funding for school districts (teacher salaries and benefits), health and human service programs, workers' compensation and unemployment. For compensation, we combined all of the salaries and benefits for state employees.
The result is that direct services for our citizens have declined by $143 million over the last three years, while staff costs have increased by $52 million over the same period. While many staff have seen pay cuts and will see their health benefit costs increase next year, the taxpayers are still paying more for compensation and seeing a reduction in services they receive.
Some have pointed to unions as the problem, but I see things somewhat differently. The problem is poor management of our state's resources by state agencies and elected officials making financial decisions in our state. It is much more difficult to work efficiently and manage staff costs than it is to simply cut services. There has also been an attempt to preserve the shell of service agencies by preserving the overhead capacity while cutting services to save money. This has been done because of a persistent attitude that regards financial adjustments as temporary rather than long term.
The taxpayers and citizens have had to face the reality of a long-lasting recession, but the state has behaved as if solutions could be somehow delayed or ignored. Most of us know we need to change the size and growing complexity of government to come into line with the reality of our current economic situation.
At the end of the month, I will be holding a telephone town hall. We held one of these very early this year and I received some good feedback from that. I want to hear what's on your mind, so please join me for this hour-long conversation on statewide issues. Here are the details:
Tuesday, Nov. 22
Call toll-free: (877) 229-8493, then enter pin number 17544
The Washington Food Industry Association is a group that promotes and protects the independent, community-focused grocery industry and its suppliers, serving both large and small communities. I was honored last week to be presented with their 2011 Keystone Award. Pictured below is myself with Jan Gee, executive director of the Food Industry Association.
As always, I am curious what you think about the information I provide. You can share this e-mail on Facebook or Twitter. I hope that I am providing useful information and really urge strongly that you help me sign up more subscribers to this update. I also encourage you to forward this to your friends and neighbors for them to sign up for my e-mail updates.
It's an honor to serve you.