Ross says process perpetuates deficits
For example, the current state budget projected $458 million in new revenue this year. With the recession, the state didn’t experience that growth. In fact, the state experienced a decline of $547.8, adding about $1 billion to the state’s $5.7 billion shortfall.
“It would be like me saying I’m going to raise my spending by 4.5 percent and hope my employer raises my pay,” Ross said.
“When you start building budgets on money that doesn’t exist, you produce deficits,” Ross said. “The governor not only spent money that didn’t exist; he spent money that didn’t materialize as a result of the recession, the $547.8 million. I don’t think you can blame the governor for the loss of revenue. I think that’s unfair because he doesn’t control the economy … but you can blame him for spending $458 million in new anticipated revenue that didn’t materialize.”
Ross said it’s a budgeting practice that needs to be fixed so the state doesn’t continue to wrestle with budget shortfalls.
“The budget has plenty of revenue,” Ross said. “It’s just they’re spending revenue they didn’t get.”
It’s a practice that continues in the 2009-2011 biennial budget.
According to the Budget in Brief, the Legislative Fiscal Bureau projects additional declines of $287 million in the first year of the 2009-2011 biennial budget, but projects 4.5 percent growth in state revenue the second year, which would net the state an additional $548.9 million in the second year of the biennium. With the budget built on the idea of spending that revenue, Ross said the state is setting itself up for more deficits in the future.
Ross said a smarter way to budget would be to plan budgets that don’t spend projected growth. That way, if it does happen, the state would have money to set aside in a rainy day fund to weather economic downturns, he said, and, if growth falls short of projections, the state wouldn’t create a deficit.
“I think most of us budget on what we’re making now,” Ross said. “In reading this budget and going through it, I am dismayed that there is no change in the process … we’ll be right back in the round of problems we have right now.”
Get My Newsletter!
Sign up for our FREE newsletters now!
