Editorial: State revenue report signals cuts, reform

The state’s projection that it will be $900 million short in the next two-year budget cycle underlines the urgency of further reforms to lower the cost of government.

This is becoming an old story. Legislators have faced shortfalls for five years, reflecting not only the sluggish economy but also their sluggishness in adjusting to it.

Earlier this year, moderate Democrats joined with the minority Republicans in the state Senate, insisted on reforms, and got some, including in state pensions and a new four-year budgeting approach. That was good but not enough.

Gov. Chris Gregoire, who did not run for re-election, says the state will have to raise taxes. But Gov.-elect Jay Inslee has promised not to go there, and in re-passing the two-thirds-for-taxes law, the people have made tax increases difficult.

At the same time, the Washington Supreme Court’s McCleary ruling is interpreted to mean public schools deserve at least $1 billion more per biennium in state money.

That liability is in addition to the $900 million shortfall. Some of the things in the $900 million could be taken out, such as the K-12 salary increases or the paid family leave program, but the choices are difficult.

The new Legislature will have to make such choices. That is what the numbers say, and there is no getting around them. What it will have to abandon is its habit of cutting higher education while filling the hole with higher tuition. This time the cuts have to come from somewhere else.

Because the state economy generates less revenue than it would at full speed, state government has to operate with less. The state has to insist that its employees pay for a greater percentage of their health-insurance coverage, just as private-sector employees have had to do.

Probably, the state has to operate with fewer workers and managers. It will also have to consider ending social programs that don’t have federal matching money.

If the state is still short after doing these things, then maybe it will be a time for a tax increase. But only then.