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Dear Friends and Neighbors,

I hope this e-mail update finds you well. I know we are going through some difficult times as a nation and state. It has been about a month since my last e-mail message, but I have plenty to update you on regarding our state's financial situation and a possible special session.

Budget shortfall

Since my last update, we have learned from the state's chief economist, Dr. Arun Raha, our tax collections have dropped and we are now facing an estimated budget shortfall of $1.27 billion. The governor has suggested the shortfall is closer to $2 billion if you want to leave a reserve for future revenue forecasts.

With revenues declining and no end in sight for our struggling economy, the governor announced she will be calling a special session starting Nov. 28, 2011, asking the Legislature to address our budget shortfall.

I support the call for a special session. The longer we wait, the worse our financial situation becomes and we lose the opportunity to find cost savings or cut spending. It is estimated the state spends about $44 million from the general fund per day. Those are days we can be saving additional monies.

The economy has struggled and the unemployment rate is high, but we have been spending too much money for far too long. The chart shows we have spent more revenues than we have had coming in since the 2008 fiscal year. You cannot run a business or a household that way, especially year after year, and expect your financial situation to be sustainable.

Also, we are not saving enough money. It is important we have a rainy day fund or savings account in place. When the budget was signed into law in June, it had $745 million in savings. However, the next day, the June revenue forecast reduced that to only $163 million. The latest forecast not only wipes out those savings, but places the state budget into a shortfall.

You may recall in 1993 the voters passed Initiative 601 which put a spending limit in place. If that was still in place today, my guess is that we would be looking at a surplus instead of a shortfall, while still allowing adequate growth over the last decade. Maybe it is time revisit the spending limit and return it to the original measure under Initiative 601.

Voters will have an opportunity to consider Senate Joint Resolution 8206 on the ballot this November. The resolution would enhance the state's existing constitutionally- protected savings account for the state budget. The proposal would build on a previous constitutional amendment adopted by voters in 2007 that created a rainy-day savings account for the state budget.

Tax increases?

Voters may have something else to consider in February if some in the majority party get their way — tax increases. Apparently some legislators across the aisle are looking into the logistics of a possible special election in February to raise taxes. You can read more about it here. They call it increasing revenue, but no matter what you call it, it is the wrong thing to do. Our economy is struggling, the unemployment rate remains high, and increasing taxes could make things worse.

We should curb our overspending problem first. It is important to note general fund and related spending by our state is expected to increase 6 percent in the next two years despite the struggles of our economy. Is anyone else spending 6 percent more than they have in the last couple years? My guess would be very few, given the financial times we are going through. Government needs to live within its means.

Let's Get Washington Working Again

We can't tax and spend our way out of this financial situation. And government doesn't create jobs. However, we can at least provide some tools to help employers create private-sector jobs. During the governor's press conference in which she was calling for the special session on Nov. 28, she said the focus of the 2012 legislative session has to be putting Washingtonians back to work.

That is exactly what we have been saying in the House Republican Caucus. We introduced a number of bills last session to strengthen the economy and spur private-sector job creation. Until we get a handle on our unemployment, and employers have stability and certainty to hire again, our budget numbers will not improve. Job growth and generating new business will increase our state revenues and help resolve our budget situation.

Click here for more information about the House Republican plan to get Washington working again.

Keep in touch

We are at a critical time for the future of our state. Your thoughts and opinions are important to me as we move Washington forward. Please contact me if you have any questions or concerns, or if my office can be of any assistance to you.

Have a great Washington Day! I love you all!

Sincerely,


Brad Klippert

State Representative Brad Klippert, 8th Legislative District
RepresentativeBradKlippert.com
122A Legislative Building | P.O. Box 40600 | Olympia, WA 98504-0600
brad.klippert@leg.wa.gov
360-786-7882 | Toll-free: (800) 562-6000