Borrow from the future to pay for today, it's the American way! Leaders in Olympia are putting together a plan to pay this year's bills by pulling out the congressional credit card and borrowing from next year's anticipated revenues. But Washington State has been down this road before, and the results weren't pretty.
Erik Smith with the Washington State Wire did a great job of spelling out the problem. Here's his explanation of the 1971 budget screw-up:
The so-called "25th month" put the state in a cash crunch for the next 16 years, brought the state to the brink of default and forced taxpayers to spend millions...
Then as now, lawmakers were facing a big shortfall - this one brought on by the "Boeing Bust." To prevent deep cuts to state programs, Evans suggested that the Legislature basically reinvent the calendar. It tacked the revenue from July 1973 onto the 1971-73 budget period, which ended June 30.
With 25 months of tax revenue, the 1971 Legislature did just fine. But that left the 1973 Legislature to cover 24 months with 23 months of revenue. So it did the same thing again with July 1975. And so on, and so on. Took years to clean it up.
This time around, legislators have been playing another shell game to balance the budget, delaying payments a little further out each year. Now they are taking out loans to pay for old loans, like paying off credit cards with other cards. You can see how this is destined to eventually fall apart.
Delaying debts and changing dates doesn't get the State out of the $1-2 billion hole we are going to be in next year. A bill to require the State adopt a balanced budget passed through the Senate but still has to go through the House. The bill's sponsor, Sen. Jim Kastama (D), recognizes the plan now under consideration doesn't put a dent in looming future debts:
The momentum right now is to paper over our budget problem and to get us out of Olympia by March 8... However, there still remains the issue in the next session, when we come back with a $2 billion shortfall from day one. Everyone recognizes this. So this is nothing more than a Band-Aid.