State budget is only balanced on paper

Staff writerApril 16, 2014 

The state budget is balanced over four years. On paper, anyway.

The law requires a positive balance over the four years ending in mid-2017. A new budget outlook projects the state to be in the black at that point by a bare $19.5 million, in a projected budget of more than $36 billion.

But that total is padded by a transfer of more than $52 million in future years from an account that funds scientific research. The prospects for a transfer that big are dubious.

Such a transfer would wipe out the Life Sciences Discovery Fund, which spends tobacco-settlement money. Gov. Jay Inslee this month vetoed the elimination in the short term. His veto didn't affect lawmakers' stated intent to wipe out the fund in the long term.

The Legislature's top budget writers, Rep. Ross Hunter and Sen. Andy Hill, expressed concern on that score during a meeting Wednesday to review the budget outlook.

They didn't get a chance to fully explain their worries because the meeting of the Economic and Revenue Forecast Council was canceled after a half hour of trying to patch in Hill, Hunter and others by phone.

Without them, the meeting didn't have a quorum and had to be rescheduled.

Hunter said in an interview afterward that lawmakers might need to revisit the details of the four-year balanced-budget requirement they passed in 2012 at the urging of Republicans.

"It's really this weird technical issue about the outlook and how are we going to use the outlook as a budget development" tool, Democrat Hunter said.

The law was bound to have bugs, he said: "We wrote that thing in the middle of the night, with a lot of shouting and screaming and stomping of feet and leaving the room and coming back and having the governor (Chris Gregoire) yell at us."

"We don't always think through all of the scenarios when we write legislation like that."

Hunter noted, though, that nothing in the law requires the governor to sign a balanced four-year budget -- only for the Legislature to write one.

UPDATE 4/17:

There's other questionable math in the four-year outlook. And while it was baked into the balanced-budget law on purpose, it makes the discrepancy involving the tobacco fund look like small potatoes.

For one, the budget assumes more revenue than is actually projected. On the spending side, it ignores the court order to increase school spending, which could cost well over $1 billion in the budget lawmakers write next year.

UPDATE 4/18:

Hill, the lead budget writer in the Senate, said the tobacco-fund discrepancy highlights that the forecast council needs to adjust how it writes the four-year outlook. But he said it shouldn't take a change in the law to do that.

"I'm comfortable with the way it is now," the Redmond Republican said of the four-year-budgeting law. "I've got to tell you, it has fundamentally changed the way we budget."

It forces lawmakers to avoid short-term gimmicks and consider long-term savings, Hill said.

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