When the coronavirus swept our state this year, Washingtonians got to work.
Employers adapted and kept critical supplies flowing to our communities, from groceries to masks and gloves. Essential workers, the majority of whom are women, put in long hours to make deliveries, and care for the sick. And families made big adjustments to online school, remote work and less childcare, all at the same time.
These Washingtonians stepped up and did what needed to be done, despite the enormous challenges and disruptions from the pandemic. It’s time for Washington lawmakers to do the same.
Today, our state budget faces a $9 billion shortfall through 2023. The shortfall through June of next year is about $4.5 billion. And a recent analysis by the nonpartisan Washington Research Council indicates that with each month that passes it becomes more difficult to fix the problem. The depth of the budget cuts vary dramatically depending on when they act.
These cuts could be as low as 3.5% if lawmakers act immediately and enact across-the-board spending cuts. Or, the cuts could be as high as 28% if they wait until next year and protect areas like basic education and retirement. Waiting only makes the problem worse.
And the same concept applies if lawmakers resort to tax increases to fill the deficit. The longer they wait, the greater the tax hit will have to be, and the more damage those increases would have on an already damaged economy.
Washington businesses are hurting. In a recent survey of Association of Washington Business members, 62% reported reduced revenue and nearly a quarter have laid off employees.
When asked how the state could help businesses during this downturn, 44% said that a business and occupation tax reduction is the best way for the state to help businesses now. Twenty-three percent listed a freeze on unemployment insurance rates, and 16% said a holiday on workers’ compensation insurance.
Gov. Inslee and Democrat leaders in the Legislature say they want to wait until after the election or next year to reconvene. Some hope the federal government will provide more funding, or free up relief funds already allocated to the states. We shared that hope, but Congress recessed for the summer break without reaching a deal.
Our state can do better than betting on federal relief to balance the state budget and provide necessary services to help people weather the pandemic. Even if this relief comes through, it likely won’t be enough to close the state’s budget gap.
The idea of cutting state services to balance the budget during an election year surely makes many lawmakers uncomfortable. Of course, the virus is indifferent to this discomfort.
Washington faces the greatest economic crisis seen in this country in nearly a century, with widespread job losses and severe economic retractions. Recovery will take years.
Employers are committed to working with policymakers as they face these difficult challenges and strive to build a stronger economy that works for every community in Washington.
Addressing this challenge will not be easy. But waiting makes it worse. It’s time for state action.
Kris Johnson is president of the Association of Washington Business, the state’s chamber of commerce and manufacturers association.