Yesterday the House Democrats released a budget proposal (PSHB 2127) to close the $1.1 billion gap between projected income and spending. I asked Bob Williams, budget analyst extraordinaire, to give me his thoughts on it.

Here’s what his initial analysis turned up:

- This budget shifts another $405 million (K-12) funding to the next biennium, in essence borrowing from the next budget to fix this one. That puts us in a bigger bind, since some have already forecast up to a $2 billion state budget deficit in the next biennium (The Governor’s own budget office predicts a deficit of $1.9 billion by 2016). 

Borrowing from future budgets is something we’ve been doing all too frequently, and it indicates a lack of commitment on the part of the Democratic leadership to make the hard choice to either 1) try to raise taxes or 2) make real spending cuts that would balance the budget without playing games. Both cost political capital, and clearly the Democrats couldn’t get enough agreement from their members to go for either option.

- It raids (sweeps) another $53.7 billion from other dedicated fund accounts

- It reduces $81.6 million in funding to local governments but gives them the ability to raise taxes easier than the current system. This will undoubtedly lead to higher taxes at the local level.

- The reserve is low, meaning the state may still run out of money before June 30 of next year. The proposal allows for a reserve of $504 million—only 1.6%.  Minimum should be a 5% reserve. The Economic Forecast Council says there is a 40% chance revenue will be lower than the current forecast.

Bob also noted a couple of straightforward solutions the Democrats left out that would have either padded the reserve or lessened the need to borrow from the next budget:

- Consolidation of health care plans at the local level into the state plan. The State Auditor estimated this could save upwards of $100 million. We outlined the pros and cons of that plan earlier this week.

- Cancellation of STEP increases for state employees. These are the automatic increases that government workers get merely for longevity, no matter their performance. Sounds good, but it’s a luxury during a time when many private workers are lucky to have a job, let alone a pay raise.

UPDATE: The TNT and Seattle Times both editorialized against the Democrats budget this morning, calling it “irresponsible” and lamenting that we’re all still waiting for a “reality-based budget.”