Budget Concerns Grow After Dire Financial Warning From OFM

[00:00:00] Speaker 1: So a week after Washington Office of Financial Management Director Katie Chapman delivered a pretty sobering outlook, warning of significant impending shortfalls across both the operating and transportation budgets. A Senate Republican budget lead is telling the center square, this is what we've been screaming from the rooftops about for the last year. This is Senator Chris Gildon, Republican representing Puyallup. He tells me that majority Democrats, in his opinion, are basically out of control on their spending. And that's really the bulk of the reason why we've ended up here. [00:00:42] Chris Gildon: We have been screaming this from the rooftops all year long, Carleen. We said, and the quote that I used every single time was, the budget they proposed was a house of cards built on a shaky foundation. It was structurally unsound. And the reason that I said that is, number one, it spent $5 billion more than we were expecting to even receive. They used a lot of one-time dollars to pay for ongoing items, just like they've been doing in years past. And, you know, $5 billion more they spent than they were even expecting to receive. And that was the budget that passed. And to make matters worse, and I believe it's fiscal year 2027, the budget as it passed was already $878 million in the hole. So the budget that passed was in a deficit. [00:01:40] Speaker 1: Now, that release from the Office of Financial Management one week ago back on June the 5th characterized the current landscape as perhaps the most challenging fiscal environment state leaders have ever navigated. And as reported by my colleague and our state editor here in Washington for the Center Square, Andrew Paxton, over the past decade, yes, inflation has grown across the state. It's climbed by 39%. And then state population between 2015 and 2025 also went up. We added more than a million new residents with increasing demand then for public services, according to that memo from OFM. They think that is a reason for the big drain on the state budget. But Senator Gildon pushes back on that narrative, basically calling bunk on, you know, attributing those factors as the reason why we've gotten ourselves into budget trouble. [00:02:39] Chris Gildon: So one of the things that the OFM director said was, look, our budget's in trouble because inflation is up high, and we've had a lot of people move into our state over the last few years. Okay, fine. However, what she's not saying is that the state budget has grown by, I think it's three times inflation and nine times population growth. The state budget is out of control. It's more than doubled over the last decade. And don't take my word for it. If you don't want, take Governor Christine Gregoire's word for it just in a recent forum when she said that state spending is out of control. She said, I think her words were, Washington state doesn't have a revenue problem. It has a spending problem. And all of these record-breaking taxes that they passed over the last couple of years. So two years ago, they passed a record-breaking tax. Then they were facing a budget shortfall because they spent everything. Now, this last year, they were facing a budget shortfall, and they passed a record-breaking tax. Now it looks like we're facing another budget shortfall. But it doesn't matter how many taxes they pass, Carleen, because taxes are not the problem. Spending is the problem. [00:03:57] Speaker 1: Now, OFM's directive specifically warned state agency heads not to count on the recently passed income tax. Of course, we have legal challenges moving forward, and we right now have Let's Go Washington out there gathering signatures on petitions to hopefully get a repeal on the November ballot. So OFM is saying, even though the current state budget picture was counting on the income tax, she's warning against crafting the budget going into 2027's legislative session, at all relying on any, you know, thinking that the income tax is going to be there. She says, basically, don't count on it. So much more on that, I'm sure, in the weeks and months to come, Governor Bob Ferguson did come out after OFM's sort of stark warning about the dire situation for the budget. And he said, I won't support any tax increases for the 2027 legislative session. So we're going to see if, in fact, that proves to be the case, if he holds to that in the months to come. [00:05:13] Speaker ?: And he's going to be the case, if he holds to that in the months, and he's going to be the case, and he's going to be the case, and he's going to be the case, and it's going to be the case, and he's going to be the case, and I'm going to be the case, and he's going to be the case, and he's going to be the case, and I'm going to be the case, and he's going to be the case, and he's going to be the case.