To paraphrase Dirty Harry: I know what you’re thinking. “Did lawmakers truly balance the budget and build in enough flexibility to deal with economic turmoil in Europe and an uncertain U.S. economy, or are we one forecast away from another special session?” Seeing how this is a $31.1 billion budget, balanced using accounting changes and reversions while leaving only a $46 million unrestricted ending fund balance, you’ve got to ask yourself one question: Do I feel lucky? Well, do ya, taxpayer?
Despite wanting to add to the minuscule $54 million unrestricted ending fund balance left by lawmakers, Governor Gregoire’s vetoes today actually reduced state reserves by $8 million. This means the unrestricted ending fund balance rests at $46 million with another $265 million in the constitutionally protected budget reserve account. Since the budget reserve account requires a vote of lawmakers to access (supermajority or simple majority if employment growth is less the 1%) the immediate flexibility built in the budget to avoid another special session or across-the-board cuts is only $46 million out of a $31.1 billion budget.
Even that $46 million amount is a charitable description when realizing it occurs based on the assumption of $120 million in reversions and reliance on a $238 million accounting change.
2011-13 Balance Sheet With Accounting Change and Anticipated Reversions
Total Resources = $31.175 billion (includes $238 million accounting change)
Total Spending = $31.129 billion (includes $120 million in reversions)
Unrestricted ending fund balance = $46 million
2011-13 Balance Sheet Without Accounting Change or Anticipated Reversions
Total Resources = $30.937 billion
Total Spending = $31.249 billion
Unrestricted ending fund balance = negative $312 million
Based on the fact we still have the June, September and November revenue forecasts to go before lawmakers are scheduled to return next January, there are three possible scenarios:
- Economic recovery – proving lawmakers’ next stop should be Vegas to take advantage of their hot streak;
- Governor ordered across-the-board cuts to deal with a drop in revenue; or
- Yet another special session to balance the budget.
For those hoping for scenario number one, do you feel lucky?