Washington’s economy is finally catching up to the rest of the nation’s, and the gathering clouds have some Democrats predicting showers.
They’re eyeing the state’s new and as-yet-underfunded “rainy day” account. Slow job growth might trigger easy access to the money, which becomes more attractive with every hit to the state’s economic outlook.
But this is far too soon to put that money on the table. The rainy day fund should be a last resort, not a first.
Washington has known a storm was brewing for quite some time, yet the Legislature allowed spending to outpace revenue growth. Lawmakers were able to squirrel away $835 million earlier this year, but it was too little, too late.
The state now faces a $2.7 billion gap between its current rate of spending and its expected revenues in the next two-year budget cycle. That shortfall is expected to grow with today’s release of new revenue projections.
Clearly, the problem is significant and will require some tough choices. But whether it qualifies as the kind of emergency voters envisioned when they established the rainy day fund last year is questionable.
The sorry rate of job growth would seem to indicate the state is fast approaching the financial straits voters had in mind, but let’s be clear on what the law says. Slow job growth merely allows the Legislature to take money from the rainy day fund with a simple majority vote rather than a supermajority. It in no way demands lawmakers do so.
Washington needs leadership that manages for the long haul. The rainy day fund stands at $728 million, about 2 percent of the state’s current budget. That’s a slim margin on which to make promises to state residents. Tapping it now will mean even less on hand to buffer the blows when a worse crisis hits.
Then there’s this: All the money in the emergency reserve won’t solve the state’s budget woes. Unless they have an unspoken plan to raise taxes, the governor and lawmakers won’t be able to escape making spending cuts.
The deeper they go now, the better the chances of making real structural changes in state government. It’s those decisions that will best position Washington for the next stormy day.
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