What is the government doing in the face of a significant drop in revenue?

Citizens face enough financial hardship trying to pay their bills, how is government cutting their spending of our tax dollars

The Reflector published my letter here.

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Taxpayer money going to the government is dropping significantly.

What are elected leaders doing in response?

COVID-19 has caused the government to shut down the national economy. Governors have created lists of “essential” businesses that are allowed to continue. Everyone else is asked to stay home. Our economy has ground to a halt.

Families are making very difficult decisions. How will they pay bills and meet financial obligations? First and foremost is buying groceries and paying for true necessities. Food, shelter and healthcare are their top priorities. The unemployed are wondering if they can find another job. Others wonder “if” or “when” they might be laid off.

The mid-April news was stunning — 22 million Americans are unemployed. In Washington, 585,000 people are unemployed. “The highest on record” was The Reflector’s headline. The Washington’s Employment Security Department warned of a “tsunami” of new jobless claims in coming weeks.

All those unemployed people are not spending money on anything but necessities. The result is declining sales taxes, 46 percent of state revenues.

On April 1, The Seattle Times Editorial Board called for Gov. Jay Inslee to make “painful cuts” to state spending. “Coronavirus necessitates painful cuts to Washington state budget,” reads the headline.

“He must not hold back. That requires political courage, but there is simply no choice. State and local governments cannot commit to higher levels of spending going forward until the economic effects of coronavirus measures are better understood. That may take months.”

Two days later, the governor vetoed a small amount of state spending, $445 million through mid-2023.

From a report by The News Tribune in Tacoma:

“Bracing for a potential massive decline in revenue because of COVID-19, Gov. Jay Inslee on Friday vetoed dozens of items. The need to put the brakes on new spending comes as state budget officials prepare for what could be a $4 billion to $5 billion decline in state revenue through mid-2023. If the economy fails to rebound quickly, the revenue drop could balloon to $8 billion to $9 billion, according to David Schumacher, director of the Office of Financial Management.”

While $445 million is a good start, it’s a drop in the bucket. State budget officials indicated the shortfall could be $8 billion to $9 billion — 20% of the state budget!

The February 2020 revenue forecast was $1.5 billion above the Legislature’s 2019 two-year budget, according to the Washington Research Council:

Why wouldn’t Inslee cut spending by $1.5 billion, matching the 2019 budget? That’s 30 percent of what’s needed and 15 percent of what “might” be needed, according to his own budget director.

Understand that 46 percent of Washington state revenues come from sales and use taxes. Another 17.4 percent comes from business and occupation (B&O) taxes, and 16 percent from property taxes.

Where are the members of the state Legislature demanding cuts in state spending? During the Great Recession, total state revenues declined by around 20 percent over three years. National unemployment has already exceeded that of the Great Recession, and in only one month!

Citizens are making difficult financial decisions, cutting spending and reducing their family budgets. Our government should be doing the same.