State budget leftovers

Spending lobbyists who expect a feast in Olympia should curb their appetites. The feast has been eaten. That was the 15.3-percent jump in state spending in the two-year period ending June 30, 2007.

It was the largest increase in spending in more than a decade, and followed the 5-percent increase of the previous two years presented by Sen. Dino Rossi. There was worry that 15.3 percent was too much, and the worriers were wrong. Business rebounded from the recession, and tax collections heaped up. Our economy runs in cycles, and always there is a time in which it's just one Thanksgiving after another. That is the feast the state is now finishing.

The latest financial forecast is for 7.7-percent growth in state revenue in the two years ending June 30, 2009. That's not bad, but it's no feast.

Victor Moore, director of the governor's Budget Office, reckons that if the state continues all programs, union agreements and pension contributions, general-fund spending will be about $29 billion, leaving half a billion in extra revenues. There should also be $1.1 billion in the bank.

There is room to spend, which Gov. Christine Gregoire intends to do in the field of education. This page supports that intention. But it should be done only partly out of new money. There should be money shifted from other things.

One is health-care benefits. State employees currently pay about 11 percent of the costs of health benefits, which is less than half the average in the private sector. That percentage should be increased significantly in the next contract.

Another is "gainsharing," a program under which pension benefits are ratcheted up when the investment fund does well for several years in a row. In 1998, this was sold to legislators as being without cost, which was false. To the best of our knowledge, nowhere in the private sector does such a benefit exist.

Moore says, "Keeping the existing benefit is not what we're looking at in the budget." That's good.

There should be other places to squeeze. There is no need for drastic cuts, but some are needed in order to fund a meaningful increase in education and to leave a meaningful rainy-day fund.

The amount of the rainy-day fund seems to run around half a billion dollars. In a budget that approaches $30 billion — and, if outside accounts are added in, exceeds that — half a billion is less than 2 cents on the dollar. The cushion should be closer to a billion.

The bottom line: The Legislature needs to do more than consume what's on the table. It's a good spread, but it's no feast.