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Home / Presidents Perspective - 2001 / Legislators: "Enjoy the Holidays, It's Going To Be A Tough New Year" |
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Legislators: "Enjoy the Holidays, It's Going To Be A Tough New Year" |
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Written On: November 30, 2001 |
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Writing this column, I almost feel like the “Grinch that stole Christmas!” It’s hard to get into the holiday spirit when people are losing their jobs and businesses are struggling.
When the state legislature convenes on January 14, lawmakers will face the daunting task of trying to fill a $1.2 billion hole in the state budget without raising taxes and fund a multi-billion dollar transportation improvement plan.
How did we get into this mess?
It seems like just yesterday the state was rolling in money, with a $1 billion surplus. With the exception of many rural communities, Washington State had enjoyed prosperous times for nearly two decades. Low unemployment and a booming economy had produced a surplus of tax revenues for the state.
Then, the bottom fell out.
The dot-com revolution fizzled, the 9-11 terrorist attacks brought an already fragile economy to its knees, and Boeing announced 30,000 layoffs. At the same time, Washington voters approved initiatives to further cut state tax revenues while simultaneously voting to increase state funding for teachers and home health care workers. And when state legislators wrote the 2001-2003 budget, they ignored warnings not to use one-time revenues to fund new programs. Now, the revenues are gone, but the programs remain.
How do we get out of this mess?
No doubt, the current state budget will have to be rewritten. Gov. Locke and most lawmakers say they're focusing on spending cuts, not tax increases. But can they cut deep enough to balance the budget? Only if they do something they've never done before: Mount an all-out review of state government to determine which services the state should provide and which should be jettisoned.
Navigating this political minefield will be difficult, but it can be done. Legislators should start with a few basic premises:
Don't make things worse. Our economy needs jobs. Don't make things worse by burdening already struggling employers with new taxes or repealing job-creating tax incentives like the manufacturers sales tax exemption on machinery and equipment. Lawmakers tried similar quick fixes in 1981 and 1993 – with disastrous results.
Make the tough choices. Making the tough choices about what government can and should do may begin to restore the voters' confidence in government and the legislative process.
Take good advice. Finally, legislators should implement the recommendations of the Governor’s Competitiveness Council and Washington’s Alliance for a Competitive Economy (WashACE). It's good advice, and lawmakers should heed it.
Perhaps our Christmas card message to legislators should read: “Rest up and enjoy the holidays. It's going to be a tough New Year.”
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