SOLUTIONS : Washington
State officials need to overhaul basic budget strategy
Washington state has a problem.
Government revenues continue to falter, with the latest economic forecast predicting $1.4 billion less revenue than originally expected over the next two years. On paper, this creates at least a $1.3 billion budget shortfall.
The governor and legislators have decided to round the problem up to $2 billion to account for necessary reserves and the possibility of continued economic deterioration.
Amid cries of catastrophe as we head toward our second legislative special session of the year, it's important to remember that actual state revenue is still projected to increase over the next two years-by $2.1 billion, or 7.5 percent, over the last two-year budget cycle. And the fact is, according to several different measures, state spending has only increased.
General-fund spending between the previous budget and the current budget is up by almost $1.9 billion, or 6.2 percent.
Revenue is up. Spending is up. So what is the problem?
The problem is the set of assumptions that control the state budget. Under the prevailing budget-writing paradigm, ongoing programs are assumed to continue and spending is assumed to go up, up, up. These assumptions represent the easy route for legislators, but a very expensive path for taxpayers.
What state budget writers need is a paradigm shift.
A paradigm is a theoretical framework in which problems are defined and solutions are formed. A paradigm shift is a fundamental breaking away from previous approaches and assumptions in search of a better way of understanding and dealing with identified problems.
One of the most notable examples of a paradigm shift involved Nicolaus Copernicus (1473-1543), the mathematician-astronomer who rejected the prevailing notions of his day and put forth a theory of the universe in which the sun, not the Earth, was at the center.
This "Copernican Revolution" completely reorganized how people thought about the universe, a fundamental shift in paradigms from which we still benefit today.
In Washington, the current paradigm is the problem. While the state's elected officials don't deal with the rotation of the stars, they do need to find a better way to deal with economic cycles.
The current paradigm assumes constant growth in spending and, as a result, always defines the state budget problem as a lack of revenue - even when expecting a $2 billion revenue increase.
With more than $30 billion to finance state programs and services, the real problem isn't a lack of revenue; it is a failure to prioritize.
Instead of assuming incremental spending increases in programs each year, budget writers need to ask four questions to reframe the way they think about the budget.
• What are the state's top priorities?
• How much money does the state have?
• What is the most effective way to accomplish the state's priorities with the money available?
• How will the state measure progress in achieving these priorities?
Asking and answering these questions can give state leaders a clearer understanding of the problem and refocus the debate on using available resources to advance Washington's highest priorities.
After riding the budget roller coaster for several years, the people of Washington have lost confidence in the ability of elected officials to properly comprehend and deal with the state's financial troubles. And the people aren't wrong - for too long sheer momentum has propelled the state budget rather than a regular reconsideration of what state government really should and should not do.
The people of Washington need representatives who will stand up and lead. It has happened before. In 2003, Gov. Gary Locke and Republican and Democratic legislators helped our state weather a significant fiscal storm by breaking with past assumptions, wiping the board clean, living within the state's means and continuing to fund the state's highest priorities.
This tried-and-true approach to budgeting is just the kind of shift in perspective the state needs today.
It's time for our elected officials to have their own Copernican Revolution.