The amount of the shortfall itself is a matter of some debate
Carleen Johnson
The Center Square
Republicans in the Washington State Legislature say Democrats are exaggerating the size of the projected four-year operating budget shortfall to justify proposed tax increases.
The amount of the shortfall itself is a matter of some debate. In November, the Office of Financial Management indicated the state would be $10 to $12 billion in the hole over the next four years.
A month later, then-Gov. Jay Inslee announced that the number had jumped to $16 billion. He said the deficit was even greater than first projected.
Near the end of last year, the Office of Program Research and Senate Committee Services estimated a budget shortfall of $6.7 billion for the 2027-2029 biennium.
During a Tuesday GOP leadership media availability event, Sen. Chris Gildon, R-Puyallup, told members of the media that he got real numbers from OFM that the shortfall is expected to be $6.7 billion over the next four years.
“What else accounts for the discrepancy from $6.7 billion to $12 billion?” Gildon asked Wednesday during an interview with The Center Square. “You add in the $4 billion for state employees and some other policy bills, then you’re at $12 [billion].”
That was a reference to new contracts with the Washington Federation of State Employees that will cost the state nearly $1.4 billion between 2025 and 2027 and almost $3 billion between 2027 and 2029.
Gildon said raises for state employees were negotiated with Inslee’s office behind closed doors, with those raises based on what is “feasible.”
“We asked OFM how they make their determination of feasibility, and their response was basically if we don’t provide raises, people will leave state government for other jobs,” Gildon explained. “So, it had nothing to do with our ability to pay, it had to do with their notion that people may leave state government for other jobs.”
The senator said he offered a bill to define “feasible” contracts for state employees.
“The governor is supposed to do a feasibility study each year to determine if those raises are feasible,” Gildon continued. “The problem is there’s no definition of what feasible is, so I offered a bill that would define feasible to say it’s only feasible if you don’t have to raise taxes to afford the raises.”
He added his bill did not receive a hearing in the Senate Ways & Means Committee.
Gildon said the state could save another $1.75 billion by pushing out “layaway policies.”
“They passed these bills in previous sessions and basically put them on layaway, and the layaway period is over, and the bill is coming due, and there’s no way to pay for it,” he said. “The good news about putting things on layaway is you can extend the layaway period, or you don’t have to make the purchase.”
He explained that bills on enhancements for early child care and other programs Washington lawmakers promised during the COVID-19 pandemic – when federal money was flowing into the state – are now due. That means lawmakers have to make some hard decisions.
“Nobody is going to get less money if we don’t make that funding happen this year,” Gildon said. “If you look at these layaway bills, it accounts for $1.75 billion in the supposed shortfall. It’s not a deficit, it’s a shortfall. Deficit implies there’s no solution; shortfall implies there is something you can do about it.”
During Wednesday’s Democrat leadership media availability event, The Center Square asked about the discrepancy between the $6.7 billion and $12 billion figures.
“When you’re in the majority, you’re actually responsible for writing the budget,” Sen. Jamie Pedersen, D-Seattle, said, “so, unlike these vague numbers you can pull out of the air, we are working very closely with nonpartisan staff going line by line through the budget, and that process has been ongoing.”
Pedersen said the actual shortfall is most certainly $12 billion.
“That’s the number that we’re working with,” Pedersen said, conceding that at least some of the numbers gap comes from pay hikes for state employees.
“If you just assume that we can have state employees make 0% more for the next two years, then probably it’s close to $7 billion,” Pedersen said of the shortfall. “That’s if we assume we could just stiff all of our employees.”
The Center Square noted that the private sector has had to rein in spending and salary increases due to increasing costs.
“That is not what the private sector is doing,” Pedersen countered. “I can tell you in my other job, I’m in charge of HR, among other things, and we just got done with having to pay 4% raises for our roughly 3,000 employees. We’re in the middle of negotiating collective bargaining agreements with our union employees who are getting much larger increases, more along the lines of 10%. That’s what’s going on in the actual economy, not 0% increases.”
According to Pedersen’s Senate biography, he is the executive vice president and general counsel at McKinstry, a Seattle-based construction and engineering firm.
“They are the majority party and they make the decisions around here, so they also are going to have to live with the consequences of those decisions,” Gildon said, adding Republicans plan to hold firm against any new taxes.
“I am more and more of the opinion that you can fund government without new taxes and without the dramatic propaganda style cuts that Senate Democrats are talking about,” he said.
This report was first published by The Center Square Washington.
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