Both Democrats and Republicans have developed very creative “maneuvers” to close the nearly $1 billion hole in the state’s biennial budget. They include accounting tricks, delayed payments to school districts or simply skipping a payment to pension funds.
As inventive as these solutions may be, the question remains: Is this any way to write a state budget?
The House Democrats offered up a balanced budget in recent weeks that included an accounting trick that called for a one-day delay in payments to the state’s K-12 schools. In essence, the House budget shifted a $330 million payment to state schools from the current budget cycle into the 2013-2015 budget cycle by moving the payment by one day, from June 30 to July 1. The move would certainly shrink the budget hole, but it could make the next biennium’s problems even worse.
The Senate Republicans are calling for skipping a $143 million payment to, according to The Olympian, “reduce liability in the state’s two worst-funded pension plans.” The Republicans would then pay back the missed payment by reducing pension payments to future state employees.
However, these tricks have plenty of critics, including state Treasurer Jim McIntire, who has been quoted as referring to each idea as a “felony gimmick.”
Now, a third accounting trick has emerged to help reduce the budget deficit. This accounting maneuver calls for the state to permanently delay in moving payments of sales-tax revenues to county and local governments into certain state accounts. Instead, the state would keep the money in the general fund for a longer period of time, collecting interest and also giving the state a larger cash cushion.
The local governments would still receive their share of tax receipts at the usual time, but this move would provide about $238 million more cash on the state’s balance sheet at the end of each month.
The tactic appears to be quietly gaining traction in Olympia — that is no surprise. Such accounting slight-of-hand would be simply too tantalizing to be ignored by lawmakers eager to find a painless budget solution and a quick exit from the current special Legislative session.
However, two of these methods result in little or no actual increase in revenues, and only the Republican proposal would save the state money over time.
Such trickery reflects a tendency by lawmakers to govern by gimmicks rather than well-reasoned policies. This isn’t solving a budget problem as much as delaying the pain for a day in the future when lawmakers are hoping the state’s economy has improved.
Lawmakers were elected to make difficult decisions, which include working through the competing proposals of this current budget cycle — not using accounting gimmicks to Spackle over a gaping budget hole.