Quick Roundup of Responses to $5 Billion Budget Shortfall

A $5 billion budget shortfall quickly captures everyone's attention.

First, the pressblog coverage from The News Tribune and Seattle PI.

Joe Turner for the TNT says,

In addition to lower than expected tax collections over the next 2 and 1/2 years, demand on state spending also is on the rise. Last week, the state Caseload Forecast Council reported that it is raising its forecast for public school enrollment by an additional 10,000 students during the 2009-11 biennium because it expects at least 7,000 private school students to transfer to state schools in light of the recession.

The PI's Strange Bedfellows blog sees a wobbly commitment by Senate Democrats to the governor's no-new-taxes approach.

Democratic leaders were wary of making the same no-tax-hike promise as Gregoire Wednesday.

"That is something we will attempt to do to the best of our ability," said Sen. Craig Pridemore, D-Vancouver.

Think tanks weighed in quickly as well. The Budget and Policy Center sent out an email citing unidentified "economic theory" to justify higher taxes.

Revenue increases will likely be necessary. Economic theory suggests that contrary to conventional wisdom, tax increases would be preferable to spending cuts in terms of economic growth.

I'll go with conventional wisdom on this one.

Paul Guppy at the Washington Policy Center was quick out of the gate with an extended assessment. 

Boosting taxes to get out of the deficit is wrongheaded for three reasons.

First, it is not fair for state leaders to turn to working citizens and businesses that already shoulder a heavy tax burden and make them pay even more to fix Olympia?s budget mess.

Second, tax increases depress economic growth, so raising the sales tax would only make a dire situation worse.

Third, it doesn?t make sense to reward the very Olympia leaders who created the deficit by letting them ratchet up the state?s financial commitments.

There will be more, much more, tomorrow.