2014 supplemental budget will need to keep state spending limit in mind

After going through multiple special sessions to adopt the state’s 2013-15 budget, the last thing lawmakers will want to do is fight about a 2014 supplemental budget. State agencies, however, have already submitted their 2014 supplemental budget wish list requesting a combined spending increase of $895 million and 806 new FTEs.

As lawmakers weigh the “restraint” of this proposed spending increase they’ll want to keep in mind the 2013-15 budget is already projected to result in spending in excess of the state’s spending limit.

According to the state Expenditure Limit Committee state spending is projected to be only $75 million below the spending limit for FY 2014 but $15 million in excess of the limit for FY 2015. Breaking the spending limit would subject the state Treasurer to civil penalties as noted by RCW 43.135.025:

“(1) The state shall not expend from the general fund during any fiscal year state moneys in excess of the state expenditure limit established under this chapter.

(2) Except pursuant to a declaration of emergency under RCW 43.135.035 or pursuant to an appropriation under RCW 43.135.045(2), the state treasurer shall not issue or redeem any check, warrant, or voucher that will result in a state general fund expenditure for any fiscal year in excess of the state expenditure limit established under this chapter. A violation of this subsection constitutes a violation of RCW 43.88.290 and shall subject the state treasurer to the penalties provided in RCW 43.88.300.”

The state spending limit was adopted by voters in 1993. It has been amended numerous times by lawmakers with the most dramatic being in 2005 when the fiscal growth factor was changed from a three year rolling average of population growth plus inflation to a 10-year average of state personal income growth.

This change allowed state spending to grow faster than was originally permitted and facilitated the large spending increase that occurred during the 2005-07 biennium.

The fact the 2013-15 budget is now running up against the new spending limit leaves lawmakers with two options:

1. Control spending to remain within what’s left of the state’s spending limit; or

2. Change the spending limit once again to allow further increases in spending during the 2013-15 biennium.

Have a preference on an option? Let lawmakers know before the 2014 Legislative session begins in January.

(Jason Mercier is director of the Washington Policy Center’s Center for Government Reform.)