Gov. Ferguson, stand up to legislative overreach

When the new governor took office Jan. 15, Democratic legislative leaders were lamenting a “budget deficit” of $12 billion, even though state tax revenues are up; unemployment is low and the economy is humming along.

Sad to say, this was all shrewdly contrived messaging, theatrical obfuscation and feigned injury. In professional wrestling, they call that “kayfabe.”

In his inaugural address, Gov. Bob Ferguson rankled many Democrats who were spinning the fiction of a catastrophic budget deficit, rather than owning up to irresponsible budget decisions over years.

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It didn’t have to be this way, and the new sheriff in the mansion knows it.

Last month, Ferguson gathered a couple of dozen staff members for a news conference, where he outlined their intense first pass at what can be cut to balance the budget. Among them were serious proposals, including having state employees take one day of furlough a month for 24 months.

The grim-faced governor was not amused by the exercise.

“We are going to have a conversation about how we got here,” he warned ominously. And, in many conversations over the coming weeks, he consistently committed to ensuring this budget predicament won’t happen again.

Just briefly, here’s how the state got here:

Democrats who control the Legislature knowingly ignored their state-paid economic forecasters who predicted state revenues in 2024 would go up only by 1% to 2%, and possibly even decrease. Averting their eyes from expert advice, budget writers opted to assume the largest revenue increase they could by law — 4.5%. And they enacted policies and new programs that spent it all.

And the professional economists were right.

So, more than a catastrophe, this is an unchecked overspending problem — no, an entrenched vice — coming home to roost. And lawmakers want to keep doing it.

The Times editorial board interviewed more than 150 candidates last election season. Whether incumbents or hopefuls, Democrats running for state office frequently would say that the Legislature must find new revenues.

Ambitious new tax proposals include a 1% wealth tax on more than $100 million for the state’s wealthiest residents. That is assessed not only on their holdings in-state, but worldwide. And there’s a business-and-occupations tax increase. Also a payroll tax, similar to Seattle’s JumpStart tax on high earners. By the way, since JumpStart went into effect in 2021, Amazon moved 12,000 Seattle-based jobs to Bellevue. So, a tax on jobs does not have a promising track record of creating or keeping jobs.

That’s a lot of coin to solve a budget problem of the Legislature’s own making — and in a time when the economy is in good shape and tax revenues are actually increasing over current levels

Now for a quick level set.

In February, Washington’s unemployment rate was a healthy level 4.3 %.

State revenues are expected to increase. In the state’s current two-year budget, which ends June 30, the state Office of Financial Management estimates the state will have collected about $66.4 billion into the general fund. Although last week, OFM forecast a slowing from its November prediction, the agency nevertheless is expecting 2025-27 revenues to increase to $70.95 billion and for 2027-29 to $76.4 billion.

And here’s an important backdrop. Over the last 10 years, the Democratic-controlled Legislature doubled the state’s approved biennial budget, from $34.3 billion for 2015-17, according to the Washington Research Council. Even adjusting for inflation, the increase is more than 40%.

Washington needs to change its ways and mind its knitting. Remember, the state Constitution dictates that education is the state’s paramount duty.

The governor has said he will seek to protect education funding. That’s good, but The Times editorial board has encouraged lawmakers — finally — to fully fund special education, add money for transportation, maintenance and supplies. That historic oversight has put many local schools in dire financial straits. Two dozen districts are facing state fiscal oversight, or already under it, because they don’t have enough money to pay the bills for basics, like electricity and insurance.

With this contrived budget gap, this is not the time to add new programs and impose new taxes. Washington state, its economy, its state revenues and employment rates are in good shape. This is the time for legislative soul-searching and making responsible budget decisions that solve the gap without hurting the economy.

Godspeed, Gov. Ferguson and lawmakers.