State lawmakers left the Capitol last week congratulating themselves on staring down a budget shortfall of historic proportions.
They are due much credit. Paring spending expectations to the tune of $9 billion took extraordinary effort and a rare willingness to depart from the usual script. Legislators didn’t always go far enough, but they did show significant progress in letting priorities guide the decision-making.
Now for the bad news: The “session from hell”? It may have been merely a warm-up.
That’s not what lawmakers want to hear, but there can be little doubt that the Legislature’s budget problems will continue long after the state’s current economic plight is history.
This Legislature and past legislatures have kicked so many cans down the road that the state’s fiscal future is a junk heap of unfulfilled promises.
Take state worker pensions. The public employee retirement system had already become a go-to source of money in lesser fiscal crises. This year, the Democratic majority wrung another $429 million from pension plans that were already underfunded to the tune of at least $5.9 billion.
Make no mistake, that bill will come due. State workers are legally entitled to collect their pensions. Lawmakers can defer investments now, but future taxpayers will have no choice but to make good on those commitments.
That’s just the beginning of unfunded liabilities that threaten future state budgets. Two years ago, lawmakers decided to promise to give new parents paid time off – but didn’t identify a way to pay for that promise. This year, the Legislature punted again, delaying implementation of the benefit but leaving the law on the books.
The 2009-2011 budget is rife with IOUs. Teachers didn’t get their cost-of-living raises, but they did exact a promise that lawmakers will make up for the miss when finances are better. Don’t think that won’t become a rallying cry for the teachers union in future legislative sessions.
Then there’s the hit to higher education. The state’s colleges and universities – which already aren’t able to keep up with the demand for highly skilled graduates – lost seats for 9,000 applicants. The state’s need for an educated workforce will only grow. Future lawmakers will have to find the money to not only restore those slots, but also grow enrollment.
Competing for that money will be K-12 schools. At the same time the Legislature was making drastic cuts in the near term to basic education, it also was laying a much-needed foundation for sweeping future improvements. Those reforms will cost billions. They will have a constitutional claim on state revenue.
All in all, the Legislature did what it had to do this year to balance the budget. But legislators shouldn’t kid themselves that the work is over, or even that the worst is past. The state has run up a huge balance on its Visa. The decisions will only get harder as times get better.
The current recession gave lawmakers cover for saying no to their constituents. That’s a skill they’ll have to keep on practicing – without political cover – as the state government moves into a much leaner future.
