Franklin Connection - Serving Franklin County, WA

By Jason Mercier
Washington Policy Center 

Is there a state budget cash deficit?

 

Last updated 7/21/2020 at 9:42am



There are two legal options to respond to a state budget deficit: The governor orders across the board budget cuts, or a special session of the Legislature occurs liquidating the deficit.

The first is a blunt instrument allowing no thoughtful response. The second provides the people's legislative branch of government the opportunity to deliberate a more surgical response.

ov. Jay Inslee, however, has made it clear he doesn't plan to call a special session to allow lawmakers to meet to balance the budget. No special session leaves the obligation for the governor required under Revised Code of Washington 43.88.110(7).

"If at any time during the fiscal period the governor projects a cash deficit in a particular fund or account as defined by RCW 43.88.050. the governor shall make across-the-board reductions in allotments for that particular fund or account so as to prevent a cash deficit, unless the legislature has directed the liquidation of the cash deficit over one or more fiscal periods."

According to RCW 43.88.270. "Penalty for violations. Any officer or employee violating, or wilfully refusing or failing to comply with, any provision of this chapter shall be guilty of a misdemeanor."

Unless the governor is now saying a cash deficit isn't currently projected in the general fund, it is unclear why he believes this budget law doesn't apply to him.

Here is what Gov. Christine Gregoire did in 2010 when complying with the same legal requirement:

" . . . WHEREAS, the anticipated revenues combined with the beginning cash balance of the general fund are insufficient to meet anticipated expenditures from this fund for the remainder of the current fiscal period; and . . .

"WHEREAS, state law authorizes and directs the Governor to implement across-the-board reductions of allotments of appropriations to avoid a projected cash deficit . . .

"NOW, THEREFORE, I, Christine O. Gregoire, Governor of the state of Washington, pursuant to chapter 43.88 RCW do hereby order: The allotment of each appropriation from the State General Fund will be reduced effective October 1, 2010, by an amount necessary to avoid a cash deficit in the State General Fund."

The requirements of RCW 43.88.110(7) are based on the cash projection in a single account. This means when evaluating if a cash deficit is projected, you can't assume balances in other accounts or the state's emergency reserves.

Accessing fund balances in other accounts, including the emergency reserves, requires an appropriation from the Legislature.

If the governor is not going to call a special session to allow the legislature to act, there is one simple question he needs to answer: Is a cash deficit currently projected for the general fund?

- Jason Mercier is the director of Washington Policy Center's Center for Government Reform. Email him at [email protected]

 

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