Former Gov. Gary Locke Warns Washington Spending Is Out of Control

[00:00:00] Speaker 1: Now, an exciting day in SeaTac today as the Association of Washington Business and Washington Roundtable held their second annual Economic Future Solutions Summit. And so prominent political figures were in attendance, including former Governor Gary Locke, who I had a chance to pull aside after he left the stage. And of course, talk of the income tax. And on Thursday, in case you missed it, or rather Wednesday, yesterday, Let's Go Washington's income tax repeal initiative, I-645, was officially certified by Secretary of State Steve Hobbs. So that will be on your November ballot. It had a greater than 80, I think 82% validity rate when they check a few of those, more than a few, but many of those petition sheets of the 511,000 plus that were submitted. And they're finding a very, you know, small rate of voter signatures being invalidated. So they're automatically moving that on to the November ballot. But former Governor Locke, when he was on stage talking, he was very concerned, he said, about the fact that Democrats, especially those crafting the budgets in Olympia, are spending beyond their means, are not working within their budget. He talked a lot about when he was governor of the state of Washington, he really focused on and he created something called POG, the priorities of government, where he went to all the agency heads and said, okay, what really are your priorities? And he said, that was a difficult balance, but you can't be crafting budgets that are spending more than the Economic Revenue Council says you're going to be bringing in, which he said is what they're doing now. And he called that irresponsible. He said, you're never going to bring in enough money to make everybody happy. And you have to learn to say no. So after he got done speaking, he was quick to leave the conference room there at the Hilton at SeaTac. So I chased him out and he was kind enough to give me a few moments to talk. And here's part of that conversation. [00:02:27] Speaker 2: There's no budget discipline. They're taking one-time money and creating permanent programs without any thought as to how are they going to sustain that program when that one-time money goes away, where they're borrowing money from various accounts and not knowing how they're going to pay that back, and then how they're going to sustain that program that they borrowed the money for if and when they return that money back to the original fund. So I think spending is out of control in Olympia. They need much more discipline. They need to set priorities. And when they say that they're going to create a program and they ask the voters to approve of that particular program, they need to make sure that they don't take that money a few years later and spend it on something else, because then the voters lose faith, whether it's with their city government, county government, or state government. Well, already they've committed that source of money to various programs, but they're already facing a budget deficit two years from now. So what's going on? They say that this was necessary to balance the budget, but even with that money, they're facing a deficit. And will they even be able to use that money for the programs that they've promised the voters? [00:03:39] Speaker 1: Now, at that AWB and Washington Roundtable Economic Futures Conference today, there were several sessions with various speakers and moderators. And one of those speakers was former lawmaker, now president and CEO of the Bellevue Chamber, Joe Fain. He was up there along with Steve Mullen, former president of the Washington Roundtable, and both of them very critical of the state's overspending and taxes and regulations and driving out business and wealth from the state of Washington. And I caught up with Joe Fain, just after he left the stage. [00:04:18] Joe Fain: Yeah, I think from a budget and spending standpoint, the most important thing that we need to do is just be honest about what the numbers are. If you look at the last few years of state spending, we always end up in deficit territory. And in large part, it's because we've just got the wrong data that we're relying on going in, not because we don't have access to the right data, but we're making intentional choices to use the wrong data. We're making intentional choices to assume that our economy is growing faster than our experts at the state are even telling us. We're making an intentional decision to say that we're not going to have any costs associated with things like lawsuits and settlements, because if we have to book those expenses, we can't spend money elsewhere. And the list goes on and on and on about ways that we are being irresponsible and unsustainable in the way that we're building our budgets. If we just fix those things, we won't head back to Olympia every year in need, massive tax increases to backfill the budget. And we can actually put our state back on a more sustainable growth, which is also really valuable for the public sector, for the public that relies on public sector services. Stable governance, stable budgets, it helps those people the most. You know, we shouldn't pretend that our regressive tax structure is maybe the perfect tax structure for a state, we should have an honest conversation about that. I do think the massive year over year increases, whether it's the capital gains tax at 7.7 and then the 9.9 and then the new millionaires tax or the income tax at 9.9. The thing that concerns me the most is so much so fast over such a narrow tax base. We are now balancing the future of the future of our public sector in Washington state off of 9,000 tax returns in a population of over 7 million in our state. 9,000 of the wealthiest, most mobile individuals and we're putting all of our future bets on their willingness to continue to be here and to continue to earn here and that they will continue to pay this tax. That is a huge, uh, that's a huge gamble and it's not a sustainable one. And so wherever folks come down on the regressivity of those of the state's tax program or where we might need new revenues for new state spending and new programs that are important, we cannot build a sustainable budget on a, on a, with a house of cards. Now, I wish I could have had the, the time to stay [00:06:44] Speaker 1: for the entire events for AWB and the Washington round table, because there were so many discussions on the agenda for the rest of the day, especially an afternoon discussion with lawmakers on both sides of the aisle. Uh, it's Noel frame and Steve Berquist, both Democrats and Chris Gildon and Ed Orcutt, both Republicans, uh, with a panel moderated, uh, this afternoon by Morgan Irwin with AWB. So that's going to be an interesting one. I have no doubt that Morgan Irwin as moderator is going to press them about the income tax and about Olympia's insatiable appetite for overspending what we're bringing in despite record revenue. And so TVW was there. I imagine the entire day's conference is going to be uploaded. I intend to look back at that discussion in particular, as well as others to bring you four episodes for a Friday and Monday on Washington in focus daily. [00:07:57] Speaker ?: Thank you.