As of Friday, February 12, 2016
During my years in the Legislature I’ve seen budget surpluses, budget deficits, budget estimates and just about every reason under the sun to spend more taxpayer dollars.
Sitting in the financial committees over the past decade I can probably count on one hand the number of times I’ve heard Johnny Q. Citizen testify that we shouldn’t be spending tax dollars on this program or that. To say the bulk of testimony from agencies, associations, workgroups and special interests is in favor of more and more government spending is a drastic understatement.
But frankly, I believe that’s how most government and government agencies are set up – to always want more. I’m not saying it is right; I’m saying that’s how it is. There never seems to be a dollar amount you can spend that will preclude them from coming back the following year asking for more.
So, in this light of the ever-expanding government entity, how do we, as responsible, common-sense legislators ever expect government to live within its means? I suggest we take advantage of the tools we already have. Let me explain.
In 1984, legislation was adopted creating the nonpartisan Economic and Revenue Forecast Council. The council is tasked with providing quarterly updates on the state’s economy and revenues (taxes). These quarterly snapshots are an invaluable tool for budget writers as they prepare to spend taxpayer dollars and can help soften the budgetary blow that downturns in the economy bring.
Another important tool is the state’s Budget Stabilization Account, or Rainy Day Fund. Created in 2007 after voters approved a constitutional amendment, this fund gets 1 percent of the state’s general tax collections each year. This money is set aside and can only be accessed by a two-thirds vote of the Legislature in good times, or a simple majority during downturns in the economy when job growth is slowed.
We also have a state actuary that’s actually an actuary! This wasn’t a requirement until recently. An actuary is a math professional who measures and manages financial risk. They are employed by insurance companies, banks, investment firms, and, yes, governments. They are critical in supplying accurate, up-to-date information on the state’s long-term investments and responsibilities like pensions.
Most recently, legislation adopted just a few years ago requires that our state budgets must balance four years out into the future. I believe this requirement has played a huge role in slowing the growth of state government. I have little doubt that state spending would have increased beyond sustainability – beyond what our taxpayers can afford – without this four-year balanced budget requirement in place.
In addition, I introduced legislation this session to add another tool to the economic toolbox in the form of dynamic fiscal notes.
When a bill in Olympia spends money, a fiscal note is required. This is done by the Office of Financial Management, the governor’s budget office. The fiscal note is supposed to provide the Legislature with the estimated cost of implementing the legislation. However, for the most part, the fiscal note stops right there: with just the cost of the legislation.
Dynamic fiscal notes include direct costs as well as revenue impacts associated with indirect or induced behavioral changes. They involve more in-depth analysis and try to quantify the economic and revenue changes tied to spending money in the way the original bill intends.
Dynamic fiscal notes acknowledge that the economy is integrated; that spending in one place may mean saving money in another, or may mean increased costs in still another. They are a sharper tool and a needed one as our economy continues to transition.
The challenge is finding the courage to embrace these tools and use them to their maximum effectiveness while still providing for and serving the citizens of our state. It’s a challenge I’m excited to meet head on as we continue to make Washington state the best state in the nation to live, work and raise a family.
- Rep. Bruce Chandler, R-Granger, is the ranking Republican on the House Appropriations Committee.