Until we learn, this budget crisis won’t be the last

At one point toward the end of her news conference last week, Gov. Chris Gregoire was asked if she feels she’s done anything to contribute to the state’s budget crisis.

That is, did the big increases in state spending over the last two years make the budget hole bigger?

“I don’t know how you could have saved your way out of this,” Gregoire said Thursday. “If you could, why didn’t 42 other states?”

National and international economics are to blame, she said, along with the mess that is the subprime mortgage meltdown and the greed that is Wall Street.

That was the expected answer. The frank answer, however, would have been “of course.” Decisions made here contributed to problems here. Just as decisions in those 42 other states in the red contributed to their problems.

Not all of the problems. Probably not the majority of them. We still get to blame Wall Street and mortgage lenders for that. But hindsight certainly shows that had we known then what we know now we would have done some things differently.

It didn’t happen because when this state – any state – is flush with cash, it’s difficult to say no to constituency groups and those who depend on state programs. When there appears to be plenty of money, the natural instinct of politicians to solve problems is in full bloom.

Don’t put all of the blame on politicians. Budget surpluses also drive citizen initiatives that both spend money and cut taxes. We all dismissed Cassandras who were warning that the increases in state revenue were based on consumer spending fueled by unrealistic house values and unsustainable home equity loan borrowing.

Even a year ago when forecasts predicted a sizable budget problem, the Democratic Legislature and the governor didn’t pull back much. Only when the national crisis started to hit home did Gregoire take action.

Did they do some things right? Yes. A bipartisan plan to create a “Rainy Day” account was adopted by voters. And the “investments” in higher education and schools might just put us in a position to pull out of this recession faster and stronger than other states.

But it doesn’t pass the smell test to say that nothing the governor and the Legislature did made this problem worse. They had the money to respond to pressures and challenges, so they did. (And if you don’t think there are pressures to spend more in good times, take a look at the current lobbying – from teachers, from social service advocates, from senior citizens – to spend more in bad times).

We don’t permit our politicians to be frank, though. Gregoire can’t concede anything because she spent the last year on the campaign trail deflecting allegations. She alluded to Dino Rossi’s campaign charges in response to the question.

“I’ve lived that political rhetoric for the last six months,” she said. And Rossi lived the rhetoric of having cut spending on health care and education during the last recession. He was accused of being heartless, and Gregoire was accused of being reckless. Unfortunately, that’s politics.

But to say now that budget decisions didn’t contribute to the current red-ink menace means we learned nothing – again. It means we’ll act the same way the next time we’re flush with tax revenue. It means we’ll go through yet another episode of deep budget cuts after the next crash.

Gregoire’s budget plan does keep a promise not to resort to higher taxes. As such, it’s reminiscent of one proposed in 2003 by then-Gov. Gary Locke. He, too, had a shortfall (though nowhere near as bad as this one). He too proposed a no-new-taxes budget. And he too found himself being praised by Republicans and criticized by fellow Democrats.

And like Locke’s budget, this one will do little to harm Gregoire politically. The groups that are most upset at her cuts would be more upset had this been Rossi’s first budget rather than Gregoire’s third.

Peter Callaghan: 253-597-8657

peter.callaghan@thenewstribune.com

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