{"id":2373578,"date":"2024-11-26T09:26:00","date_gmt":"2024-11-26T14:26:00","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/the-driver-behind-washington-states-budget-shortfall-washington-examiner\/"},"modified":"2024-11-26T09:27:14","modified_gmt":"2024-11-26T14:27:14","slug":"the-driver-behind-washington-states-budget-shortfall-washington-examiner","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/the-driver-behind-washington-states-budget-shortfall-washington-examiner\/","title":{"rendered":"The driver behind Washington state\u2019s budget shortfall &#8211; Washington Examiner"},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"&quot;\"><div class=\"counts mashsbcount\">20<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Fthe-driver-behind-washington-states-budget-shortfall-washington-examiner%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=2373578&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><p>The article discusses Washington state&#8217;s impending budget shortfall,\u2063 projected to be between \u200c$10 to $12 billion over the next\u2064 four years. Unlike\u200b previous economic downturns, this deficit is not due \u2064to a decrease in \u200btax\u2063 revenue; in fact, the state \u200dhas seen record levels \u200bof tax collections, with a notable increase of $35.4 \u2064billion in total\u2063 state taxes during \u2063the fiscal year 2023\u2014up \u20625.8% from the previous year. <\/p>\n<p>Key drivers of this budget gap include rising costs and \u200bincreased demand for state services, as highlighted by\u2064 Office of Financial Management Director \u200cPat Sullivan, who cited adjustments in revenue forecasts\u2062 and \u2063soaring caseloads. Despite overall tax\u2064 revenues rising significantly over the past decade, certain taxes, such as the real \u200destate\u200b excise tax, have declined. The \u200darticle mentions substantial increases in revenue from\u200d other taxes,\u200d including the \u200destate and capital gains \u200dtaxes.<\/p>\n<p>This complex financial scenario is prompting state leaders to rethink \u2062budget priorities to ensure sustainability in\u2064 the\u200d post-COVID era, while \u200dsome officials\u2063 believe there&#8217;s sufficient \u200drevenue\u200d to maintain existing programs without elevating taxes. The discussion highlights\u200d a tension\u2062 between fiscal responsibility and the need to meet \u200cpublic service demands amid evolving\u2062 economic conditions in Washington state.  <\/p>\n<p class=\"readmore\">\n    <button onclick=\"showReadMore()\" id=\"readmorebtn\">Read more&#8230;<\/button>\n<\/p>\n<hr id=\"line\">\n<span id=\"more\"><\/p>\n<p><?xml encoding=\"utf-8\" ?><?xml encoding=\"utf-8\" ?><?xml encoding=\"utf-8\" ?><?xml encoding=\"utf-8\" ?><?xml encoding=\"utf-8\" ?><?xml encoding=\"utf-8\" ?><\/p>\n<div class=\"tdb-block-inner td-fix-index\"><span class=\"tdb-mobile-menu-button\"><i class=\"tdb-mobile-menu-icon td-icon-mobile\"><\/i><\/span><\/div>\n<div class=\"tdb-block-inner td-fix-index\"><span class=\"tdb-header-search-button-mob dropdown-toggle\" data-toggle=\"dropdown\"><i class=\"tdb-mobile-search-icon td-icon-search\"><\/i><\/span><\/div>\n<div class=\"tdb-block-inner td-fix-index\"><\/div>\n<div class=\"tdb-block-inner td-fix-index\"><span class=\"tdb-mobile-menu-button\"><i class=\"tdb-mobile-menu-icon td-icon-mobile\"><\/i><\/span><\/div>\n<div class=\"tdb-block-inner td-fix-index\">\n<div class=\"tdb-drop-down-search\" aria-labelledby=\"td-header-search-button\">\n<div class=\"tdb-drop-down-search-inner\">\n<form method=\"get\" class=\"tdb-search-form\" action=\"https:\/\/www.washingtonexaminer.com\/\"><\/form>\n<div class=\"tdb-aj-search\"><\/div>\n<\/div>\n<\/div>\n<p><a href=\"http:\/\/www.washingtonexaminer.com\/#\" role=\"button\" aria-label=\"Search\" class=\"tdb-head-search-btn dropdown-toggle\" data-toggle=\"dropdown\"><i class=\"tdb-search-icon td-icon-search\"><\/i><\/a><\/div>\n<div class=\"tdb-block-inner td-fix-index\"><\/div>\n<div class=\"tdb-block-inner td-fix-index\">\n<h1 class=\"tdb-title-text\">The driver behind Washington state&rsquo;s budget shortfall<\/h1>\n<div><\/div>\n<div class=\"tdb-title-line\"><\/div>\n<\/div>\n<div class=\"tdb-block-inner td-fix-index\"><\/div>\n<div class=\"tdb-block-inner td-fix-index\"><\/div>\n<div class=\"tdb-block-inner td-fix-index\">\n<div id=\"Brid_1894453\" class=\"tpd-featured-video bridtv\"><\/div>\n<p>(The Center Square)&nbsp;&ndash;&nbsp;Earlier this month, state officials&nbsp;<strong><a href=\"https:\/\/www.thecentersquare.com\/washington\/article_860a43c2-a7da-11ef-976e-2b0d067de315.html\" target=\"_blank\" rel=\"noreferrer noopener\">reported<\/a><\/strong>&nbsp;that the operating budget faces a $10-12 billion deficit over the next four years.<\/p>\n<div class=\"article-paywall\">\n<p>Unlike during the Great Recession, the budget deficit isn&rsquo;t due to a decline in revenue, as many of the state&rsquo;s tax collections are at record levels while other new taxes have been imposed.<\/p>\n<p>Although the state Economic and Revenue Forecast Council recently&nbsp;<strong><a href=\"https:\/\/erfc.wa.gov\/sites\/default\/files\/public\/documents\/meetings\/rev20241120_0.pdf\">lowered<\/a><\/strong>&nbsp;expected revenue for the current and next biennium by $270 million, the state Department of Revenue&nbsp;<strong><a href=\"https:\/\/dor.wa.gov\/sites\/default\/files\/2024-06\/Tax_Statistics_2023.pdf\">reports<\/a><\/strong>&nbsp;that all state taxes generated $35.4 billion for the fiscal year 2023, a 5.8% increase from the 2022 fiscal year.<\/p>\n<p>In that timeframe, the state sales tax revenue increased by 6.2%, while revenue from that has doubled since 2014, from $8 billion to almost $16 billion.<\/p>\n<p>Other taxes have also had significant increases over the past 10 years. In the fiscal year 2023, the property tax brought in $4.5 billion. In 2014, it brought in $2 billion.<\/p>\n<p>One major tax to buck that trend is the real estate excise tax, which brought in $1.4 billion in the 2023 fiscal year, a 44% decrease from 2022. Yet, it&rsquo;s still higher than the amount generated in 2007 when the housing market was at its peak.<\/p>\n<p>Other significant tax increases or major new taxes include:<\/p>\n<ul class=\"wp-block-list\">\n<li>The estate tax, which increased from $366 million in 2022 to $847 million in 2023, a 131% increase.<\/li>\n<li>The capital gains tax, which started collections in 2023 and brought in $847 million.<\/li>\n<li>The business and occupation tax, which increased from $6 billion in 2022 to $6.6 billion in 2023, an 11% increase.<\/li>\n<\/ul>\n<p>Overall, state revenue has almost doubled&nbsp;<strong><a href=\"https:\/\/dor.wa.gov\/sites\/default\/files\/2022-03\/Table01_5.pdf\">compared<\/a><\/strong>&nbsp;to 2014, when it brought in $17.8 billion.<\/p>\n<p>During the Great Recession, state revenue began to decline&nbsp;<strong><a href=\"https:\/\/dor.wa.gov\/sites\/default\/files\/2022-02\/tax%2520statistics%25202009.pdf\">beginning<\/a><\/strong>&nbsp;in the 2009 fiscal year. Revenue would not begin to increase until the 2011 fiscal year, which was still below 2008 revenue levels. Revenue finally went above 2008 in&nbsp;<strong><a href=\"https:\/\/dor.wa.gov\/sites\/default\/files\/2022-02\/tax_statistics_2013.pdf\">2013<\/a><\/strong>. As a result, the state Legislature faced major budget&nbsp;<strong><a href=\"https:\/\/www.spokesman.com\/stories\/2011\/mar\/18\/state-facing-deeper-cuts\/\" target=\"_blank\" rel=\"noreferrer noopener\">deficits<\/a><\/strong>, including $5.1 billion in 2011 alone.<\/p>\n<p>In his Nov. 8&nbsp;<strong><a href=\"https:\/\/ofm.wa.gov\/sites\/default\/files\/public\/legacy\/agencycommunications\/FY2025\/Budget%20Reductions%20for%20Fiscal%20Year%202025%20and%202025-27%20Biennium.pdf\">memo<\/a><\/strong>&nbsp;to state agency directors, Office of Financial Management Director Pat Sullivan attributed the budget deficit &ldquo;to the recent revenue forecasts that were adjusted down and the increase in caseloads and the cost to maintain existing programs.&rdquo;<\/p>\n<p>&ldquo;Transportation budget revenue projections also have trended down for several forecasts,&rdquo; he wrote. &ldquo;That, along with rising costs and increasing demands, has created a situation where revenues are not covering current commitments.&rdquo;<\/p>\n<p>Reacting to ERFC&rsquo;s latest revenue forecast, Senate Ways &amp; Means Chair June Robinson, D-Everett, wrote in a&nbsp;<strong><a href=\"https:\/\/senatedemocrats.wa.gov\/robinson\/2024\/11\/20\/robinson-issues-statement-on-november-revenue-forecast\/\">statement<\/a><\/strong>&nbsp;that &ldquo;I will work with my colleagues and our incoming Governor to serve the needs of the people of Washington and provide the services they expect from their state government. At the same time, we need to right-size government to fit our post-COVID reality.&rdquo;<\/p>\n<p>She added that &ldquo;during the pandemic, many of our decisions centered on helping Washingtonians, schools, small businesses, and others simply survive the unprecedented challenges they faced. Now, as we look to the future, we&rsquo;re&nbsp;building budgets that allow us to prioritize growth and sustainability without COVID overshadowing every decision. This is an opportunity to refine our focus and ensure our resources align with the needs of the people of Washington.&rdquo;<\/p>\n<p>Elected officials like ERFC Chair Lynda Wilson, R-Vancouver, argue that the budget situation isn&rsquo;t quite as dire as it&rsquo;s made out to be. In a&nbsp;<strong><a href=\"https:\/\/lyndawilson.src.wastateleg.org\/statement-budget-leader-says-funding-programs-services-safe-concern-demand-billions-new-spending\/\">statement<\/a><\/strong>&nbsp;she wrote that &ldquo;the chief economist warned our council that the state&rsquo;s economic growth would be slow this year, and that has been the case. But still, between projected revenue and available reserves there is more than enough to balance a 2025-27 operating budget that maintains the services and programs being provided now.&rdquo;<\/p>\n<p>She added that &ldquo;the problem &ndash; and the reason our Democratic colleagues are already talking about tax increases &ndash; is the billions of dollars&rsquo; worth of new spending requests we are likely to see in the governor&rsquo;s budget proposal. Those include $4 billion tied to new collective bargaining agreements with state workers.&rdquo;<\/p>\n<p>Posting on X in reaction to the proposed bargaining agreements, Washington GOP Chairman Jim Walsh, R-Aberdeen&nbsp;<strong><a href=\"https:\/\/x.com\/JimWalshLD19\/status\/1860720513380982821\">wrote<\/a><\/strong>&nbsp;that &ldquo;I&rsquo;ll believe this projected state budget deficit is a real crisis when left-wing bureaucrats in Olympia start acting like it&rsquo;s a real crisis. Until then, I&rsquo;ll assume the projection is just an excuse to raise state taxes even higher.&rdquo;<\/p>\n<p>Making a similar claim is Washington Policy Center&rsquo;s Small Business Center Director Mark Harmsworth, a former state legislator. In a recent blog&nbsp;<strong><a href=\"https:\/\/www.washingtonpolicy.org\/publications\/detail\/washington-state-wants-to-increase-bureaucrats-salaries-by-13-billion-despite-claims-the-state-is-facing-a-budget-shortfall\">post<\/a><\/strong>&nbsp;he wrote that &ldquo;the state does not have a revenue problem, it has a spending problem. It seems the budget deficit is a state-created spending problem that the state leaders don&rsquo;t want to acknowledge.&rdquo;<\/p>\n<\/div>\n<p> <script data-cfasync=\"false\" src=\"http:\/\/www.washingtonexaminer.com\/cdn-cgi\/scripts\/5c5dd728\/cloudflare-static\/email-decode.min.js\"><\/script><script>!function(){var g=window;g.googletag=g.googletag||{},g.googletag.cmd=g.googletag.cmd||[],g.googletag.cmd.push(function(){g.googletag.pubads().setTargeting(\"has-featured-video\",\"true\")})}();<\/script><script>var _bp=_bp||[];_bp.push({\"div\":\"Brid_1894453\",\"obj\":{\"id\":\"27789\",\"width\":\"1280\",\"height\":\"720\",\"stickyDirection\":\"below\",\"video\":\"1894453\"}});<\/script><script defer src=\"https:\/\/services.brid.tv\/player\/build\/brid.min.js\"><\/script><\/div>\n<div class=\"tdb-block-inner td-fix-index\"><\/div>\n<div class=\"tdb-block-inner td-fix-index\"><\/div>\n<p><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Washington state faces a $10-12 billion budget deficit, not due to falling revenue, as tax collections are at record highs<\/p>\n","protected":false},"author":1,"featured_media":2373579,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"https:\/\/www.washingtonexaminer.com\/wp-content\/uploads\/2024\/04\/AP24014160536170-1024x683.jpg","fifu_image_alt":"","footnotes":""},"categories":[],"tags":[],"class_list":["post-2373578","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry"],"fifu_image_url":"https:\/\/www.washingtonexaminer.com\/wp-content\/uploads\/2024\/04\/AP24014160536170-1024x683.jpg","_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2373578","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=2373578"}],"version-history":[{"count":2,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2373578\/revisions"}],"predecessor-version":[{"id":2373581,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2373578\/revisions\/2373581"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/2373579"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=2373578"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=2373578"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=2373578"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}