Report from Olympia
By Senator Georgia Gardner

We faced an almost insurmountable task and we did it. We came up with a balanced budget for the state of Washington; we came up with an excellent transportation proposal; and we did it all in 60 days. That’s the good news. The bad news is what it took to get there.

I don’t think there is any question that the budget shortfall has dominated the news since September 11, but Washington was already headed into an economic decline before the terrorist attacks. Our triple whammy of drought, electricity shortage, and earthquake brought us expenses we couldn’t have foreseen. Even the fall-out from the energy crisis was unexpected. We in Washington felt we could weather it – and we could have – except we were required to sell power to California at a time we needed it at home. To do so, we shut down the aluminum industry in Washington State.

We knew our transportation crisis was causing businesses to be concerned about the additional costs of locating in Washington. Boeing moved their headquarters, and the bottom fell out of the dot.com industry. Then it was September 11. Washington has been the leader in both international trade and airplane manufacturing, the two industries hardest hit in the aftermath. In Whatcom County, we know first-hand the effects of the large drop in commerce that comes with tightened security at the border.

We did have some concerns last year when we wrote the biennial budget. Even though we could not have predicted what actually happened, we had already started to tighten the purse strings. During the budget debate in 2000, our Republican colleagues offered about $500 million in additions to services that we felt we could not prudently accept. The amendments were good ones and it was difficult to vote against them. Fortunately we did, or that budget hole we faced this year would have been even greater.

We had to find $1.6 billion dollars of additional funding or cuts this year in order to balance the budget. Not only had we suffered a large decline in revenues, but also a dramatic increase in costs. When money gets tight in our personal budgets, we cut our spending. We do without. In government, however, there are soaring costs we can’t escape. We have unemployment, retraining, and medical care for all the folks who lost their medical insurance along with their jobs. We have to pick up more of the senior care and services to the disabled community. Our medical costs alone would break the budget.

It wasn’t a year we could raise taxes and place further burdens on our people, so we had to make cuts. These are real cuts to real people and they are going to hurt us all. We will all be directly affected.

For many of us, it will be an inconvenience – a longer wait to renew a driver’s license or get a building permit. For students and their families, it will be higher tuition and fewer openings for our colleges and universities. For teachers and school districts, there will be fewer amenities and less opportunity for planning and development. For all of us, there will be fewer criminals prosecuted and those convicted will spend less time in jail. It will take longer for a police officer or a fire department to respond to your call.
But the people who are really hurt by this budget are those that need a helping hand, the elderly, the sick, and the disabled. Through government programs, we have been able to keep people working, contributing
members of the community. This will no longer be the case. We have been able to get children ready to go to school so they can succeed once they get there. No more. We have been able to provide independence, housing, and jobs for the developmentally disabled. Can’t do that now. We have provided caregivers to seniors so they can stay in their own homes. This will be severely curtailed.

It could have been worse. We were able to maintain school employees’ salary increases, although state workers won’t get anything. We have maintained a starvation level of funding to keep our nursing homes going. We have done everything we can to skinny everything down while minimizing the damage, and we got pretty creative in doing so. We did use some of the rainy-day fund, but we left $300 million for next year. We shuffled programs and funds around to get the maximum return. And we securitized a portion of the tobacco settlement.

We took out a mortgage on one-fourth of the tobacco payments; we elected to receive the money upfront, at a discount. This is the same as asking a lottery winner if he or she wants the payments over 20 years or a lesser amount right now. We need the funding now; the money will be worth less in the future; and further budget-cutting will create expenses down the road that will far exceed any discount we have to take on immediate payment of the tobacco funds.

There has been a fair amount of concern about this tobacco mortgage, but I think it is a prudent move. I also wonder how many of the folks expressing concerns have home equity loans. Sometimes the best thing to do is consolidate the debts at a lower rate of interest, get through the bad times, and repay it. It is a good alternative for us as individuals and it is good for the state.

These budget reductions hurt real people and they hurt us as a group. They hurt now and they will continue to have repercussions for many years to come. If securitization of a portion of the tobacco money can minimize this impact, I support it. The question to ask ourselves is, “What are the alternatives?” Specifically what could we schedule for additional cuts? If the answer is to cut state employees, which ones? The real increases in staffing have come in education and corrections.

In an article on the legislative session, I have spent my time on the state budget because I feel it has been the biggest issue. The transportation budget will go to the voters in November. I wanted to see it passed in the legislature for three big reasons:

First, the unemployed workers in Whatcom County will be in line for a significant number of jobs and they want to go to work this summer, not next. Remember, for many of our unemployed, their unemployment benefits have already run out and these families will be without funds for another year.

Second, I wanted to inspire confidence in our business community that we were willing to take action on our transportation problems so no more of them would leave the state.

And finally, I didn’t want to lose billions and billions and billions of dollars of federal money designated for the state of Washington. Senator Patty Murray did a fabulous job getting the money earmarked for us. All we had to do is pass a transportation budget and have our requests in by March 31. That federal money is our money, paid from our gas taxes, and it will now go to other states. It won’t wait until we get there next year; it is lost and gone forever. I believe these are compelling reasons to pass the transportation budget in the legislature and a large bipartisan majority of the Senate agreed with me.

Although the session was primarily budget oriented, we did pass a number of good measures and we failed on a few others. I was pleased to enact some safety and consumer protection legislation along with election reforms and local government issues. I was disappointed to lose the simple majority vote for school elections.

I’ll be spending the months until the next session working primarily on predatory-lending issues and I should have legislation ready for January 2003. It isn’t possible to provide as much information as voters need to judge our performance as legislators and I hope the readers will access the Washington State Government website. See what bills we sponsored and how we voted. Tune into TVW to listen to our meetings and floor sessions. Contact us directly. We’ll have more hard decisions to make next year and we value your ideas and opinions..
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