The Budget Shortfall facing Washington’s government has Olympia scrambling
By Justin Chartrey
Never spurning an opportunity to hold out their hand for a slice of the pie, taxing everything from gas to groceries, to hotel stays, and too many cow farts; it is laughably concerning that as the calendar rolled over to 2025, Washington’s government is now facing a sea of red.
No, that is not the rivers of innocent blood flowing out of the state-sanctioned abortion mills, it’s the state’s ledger book at the start of the new legislative session. The numbers for the new year are indeed that bleak, as the legislature for Washington will be opening the new term with a budget deficit of $12 billion dollars.
“Folks in this state have been accustomed to just finding the money somewhere,” said Leonard Christian, senator of Washington state’s fourth district at a recent town hall meeting in Spokane Valley. “It’s going to be a difficult year.”
For his part, Christian looks forward to the session as part of the minority party, gearing up for what he termed as a “blood bath” on the other side of the aisle.
“Every one of those folks want their little pet project,” Christian added, “We’re just going to watch as they self-destruct and try to figure out what programs to keep fully funded and what they’re going to cut.”
For those who could not fathom the idea that the government levers of motion could grind to a halt because of a silly thing like a budget deficit (see the federal spending deficit residing in the tens of trillions of dollars), Christian said that state budgets do not work that way, but that when the money’s dried up, that’s it, no more spending.
The frightening prospect facing Olympia, then is that tax hikes and ever-widening coffers are no longer enough to outpace the rampant spending of a government that became fattened up by federal Covid dollars that ramped up spending in 2020-2022, including a booming housing market artificially stimulated by Covid bonuses. Those sales tax profits even allowed the previous governor Jay Inslee to proclaim a budget surplus in the midst of his final term.
By the end of it, though, and with Washington now looking to new governor Bob Ferguson for answers, that surplus has not only evaporated, it has been replaced by a crushing deficit that has state democrats using phrases like “budget cuts,” usually anathema to their position. However, there seem to be few options. Tax revenues and the newly minted “Capital Gains Tax,” which taxes all capital gains over $262,000 in a calendar year at a rate of 7%, are projecting $1 billion less than previously thought. Not only that, but programs enshrined in the Fair Start for Kids Act are expected to add nearly $1 billion to the outgoing in the next two years, and more than $2.1 billion over the next four.
Ironically, one of the most prized of democrat policies in the last three years, the carbon tax that penalizes companies or business entities for excessive carbon emissions unless they purchase carbon credits at auction, has unexpectedly inflated costs to cities and school districts who often do not meet the threshold for emissions. These school districts, with aging buildings and older gas or oil furnaces, are not able to retrofit their buildings, much less foot the bill for stiff penalties imposed by the states that likewise budget for much of their expenses.
“This coming year schools are having to pay for energy audits,” Christian said. “East Valley (Spokane) doesn’t comply and so they will have to pay a fine to the general fund out of their school money to cover the fact that their building doesn’t meet with today’s standard.”
While remaining utterly non-committal on the idea of more aggressive taxation, Ferguson has said they will look to trim the fat from the spending in the next two years. But then again, $12 billion is a daunting gap, and the party in power has never looked sideways at a possibility to tax the populace. More than that, there is speculation that with the easy defeat of three initiatives that would have removed, among others, the capital gains tax, the carbon tax, and the gas tax, the people of the state are unopposed to the idea of more taxes, as long as they are directed at the rich and independently wealthy.
Leonard and his cohort may relish the idea of watching state democrats squirm during this session, but one has to wonder who, in the long term, will end up doing the squirming.
