Tuesday, June 19, 2012

Discussion # 1, Budgeting in Challenging Times

Thanks to our organizers, attendees, elected officials, policy makers, and advocates for making our first panel such a success.

For the first blog post, I would like to open the forum to a general comments of the first day's panels. If any topics or comments today made a significant impression on you and you would like to comment further, please take a moment and do so.

If you are a Western student enrolled in the class, please do not make an anonymous post as it will make it hard to give you credit. If you would prefer not to use your name, use an alias and let us know who you are.

I found the description of the differences between those living in a rural environments vs urban environments very thought provoking. We tend simplify differing points of views by speaking of them as if they fall onto some point on a line that runs between two polar opposites.

Rep. Wilcox pointed out that those living in both rural and urban areas, especially if by choice, do so out of a desire to enjoy aspects that are unique to that particular environment. It is not hard to understand that one living in an area where they can have a piece of land, would want to exercise control over that land. It also makes sense that they would  not want to be unduly affected by regulations that are designed out of a set of considerations needed regulate people living in closer proximity. From a budgetary standpoint, the person living in the rural environment may also resent being taxed to create and enforce regulations designed for their "city cousins."

This highlights one of the great challenges in policy making. Problems are rarely black and white, yet many solutions we propose treat them as if they are. There are ways to approach complex problems and one important strategy is promoting an open dialogue. The Munro panel discussion today provided a group of people who may not have otherwise interacted, with an opportunity to be involved in a dialogue together. I look forward to more opportunities to engage in an open dialogue as we progress through this year's seminar.



21 comments:

  1. It was a good introduction to this series to hear about the complexity of budgeting from the people who actually participate in the process. Listening to the news, I am always tempted to chalk up Washington’s economic difficulties to bipartisan conflict, but the panelists showed that there is much more behind the budget crisis than merely a failure of Democrats and Republicans to compromise. In fact, the panelists agreed that budget-making, in contrast to other legislation, is a very bi-partisan activity. Moderator Dick Thompson mentioned several aspects of Washington’s history, geography, and government institutions which create divisions in politics. Washington’s constitution has a populist, anti-railroad attitude, created from the people’s reaction to the influx of railroad systems during the turn of the 20th century. Parts of the constitution such as Article 8, section 7 restrict government from lending to private companies, and other sections have make K-12 education a “paramount duty.” These provisions, as well as a populist culture, have stayed with the state throughout the century and add obstacles to the budgeting process. Geographic divides also create problems for compromising on a budget. Some of the divisions in Washington were said to be between the eastern and western parts of the state, between eastern and western King county, urban and rural areas, and between “Seattle and the world.” Divisions in Institutional government, between the House and Senate, the legislature and executive branches, and between all of these groups and government administration also cause conflict. Thompson claimed institutional politics are always at play and there is almost never a compromise. The panelists focused mostly on Washington’s tax system as the problem in budgeting. Representative J.T. Wilcox argued his rural constituents would be opposed to increased taxes on the state level, saying the main conflict is between urban and rural areas. Whereas Senator Doug Ericksen said raising taxes would be the easy solution. However, he claims this solution ignores long term issues in budgeting. Ericksen believes there needs to be a structural reform to budget making so policy-makers can better predict the waves of Washington’s very elastic revenue stream (coming mostly from Washington’s general fund collected through sales and B&O taxes).

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    1. Thanks to the author of this post for their excellent comments!

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    2. Marc, oops these comments were by me (Nellie). I thought I was signed into my google account!

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  2. From Wednesday's 'Higher Education' seminar, I understand that there needs to be a reform for better funding in the higher education sector. The representatives all seem to agree on the notion that we are facing a budgetary crisis and that we need to improve our services in the higher education department. Unfortunately, I did not get the chance to speak or ask questions in depth to the representatives regarding the mechanisms to prevent any further cuts. Anyhow, I wanted to point out that Rep. Larry Seaquist mentioned that there is a gap among the middle school/high school students perception on universities and/or colleges. I agree with this statement because I am affiliated with a program at WWU called HANDS that focuses to assist high school students/middle school students gain better access to college information. While volunteering with this organization, I have noticed that many students do not even see themselves ever going to college. Many of them lack the confidence because they feel as if they do not have enough money to ever make it to college; in fact, some are not aware of any scholarship programs or financial aid. Our HANDS program is a program that attempts to fill this ‘information’ gap those high school students and/or middle school students are lacking. If there are further budgetary cuts however, a program like HANDS will not receive the funds that it needs to make the difference in the community. I just find it vital to point out to our representatives that we are in need of these programs at universities and colleges. As mentioned earlier in today’s seminar by most of the representatives, we are in vital need to ‘stem the tide’. Rep. Seaquist mentioned that Washington is actually a undereducated state, where individuals that are 25 year of age today are less educated than their parents. Evidently, Rep. Seaquist elaborates that individuals with higher income are the ones that are becoming more educated; thus, as a community, we must recognize that higher educational programs that assist in filling this informational gap to those students that are not as affluent are essential to our state. I appreciate the representatives efforts to push for us students to actually contact them and articulate our academic ambitions and desires.

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    1. Thanks for commenting Aman. I will be reading the posts more carefully over the weekend.

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  3. Marc, thanks for summarizing my point more clearly than I did!

    Rep. JT Wilcox

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  4. Thanks for your comments and and participation Representative Wilcox.

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  5. From the introduction of the Munro Seminar on budgeting in tough economic times, one general idea was raised: the problem does not lie simply between in state politics such as different viewpoints of democrats versus republicans. There is so much more involved and at stake, that is causes a crossover of beliefs between the two parties. Dick Thomas, on the board of trustees at Western, pointed out several conflict areas such as geographic politics. This involves east and west, rural and urban, and Seattle vs. the world. Other factors are institutional politics (house vs. senate), and personal politics that show different point of views within the house. I found it interesting how a point was made to separate the revenue and economy. Revenue and expenses all depend on individuals buying items, so one cannot correlate state revenue with the economy. Marty Brown, the director of financial management discussed the three different budgets that we have: operating budgets, building budgets, and transportation budgets. He continued to explain how our economic standing is the worse it has ever been in 80 years. Ross Hunter, the 48th district rep., continued by saying that the budget isn’t one set of numbers; everything is constantly changing with growth and inflation. Population growth, inflation, Medicaid are all factors that contribute to the budget we have, but mere averages don’t tell us how to change society and what numbers we need to alter. I found Representative J.t. Wilcox’s argument the most interesting, because not often do you see representation from the rural communities. He discussed how tax increases will be opposed to by those living in rural communities. They want to be left alone and given the freedom of less laws living in these communities, and these taxes would lead to a strong conflict between the rural and urban areas. Another point of view comes from Senator Doug Ericksen who is from a different urban area with a completely different background then Mr. Wilcox, he argues that these increases in taxes would be a solution to our budgeting problems, but it won’t come easy. This is a quick fix and scrapes the surface of the problems by not ensuring a stable future for our state.

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    1. Shannon, how do you think we can strike a balance between the needs of different populations of people? Can we achieve a balance, or do laws and policies necessarily favor one population over another?

      Or like in a city where there are zoning laws, can we have "rural" and "urban" laws that better address the needs of the differing areas?

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  6. From the first panel's discussion about budgeting, I completely agree that this is not a bipartisan issue. This is a crisis that American citizens must somehow fix and even more miraculously maintain. I was very relieved to find that everyone in the panel were friends despite their differing political views. I also appreciated the insight that they possessed about the budget. It was reassuring to know that there is some control. In order to build our budget, we must understand growth. By understanding growth, we can help make decisions because we know what is growing, and we know what is decaying. I learned from the panel that making assumptions will not help build the budget.

    Senator Doug Erickson brought up that we face a challenge. This challenge is how to prioritize spending and decrease perpetual debt. There are so many other funds that are prioritized higher than others. When transportation and K-12 are receiving such vast amounts of funding, how long can Higher Education keep receiving cuts and hope to simultaneously train young minds to help end this deficit?

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    1. I think you raise a very good point which I forgot to touch on in my post about assumptions. Budgeting is always about assumptions especially in Washington where the highly elastic revenue stream often creates surprises for law-makers come budget planning. I think this is a very important aspect of budgeting in Washington which most people don't understand (and which I did not fully understand until I saw this panel).

      That being said, I feel for these politicians because it really makes my brain hurt when I imagine being a law-maker trying to balance a budget amongst all the competing interests while not fully knowing the actual limit of your spending.

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    2. It makes my brain hurt too, Helen. Thanks for the well thought out comments guys. What might some solutions be to the revenue/spending problems the state faces?

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  7. The first seminar illustrated the problems of budgeting on the state level. Admittedly, I was naive about the issue at hand but after the seminar I had a general idea of the problem and how some representatives were going about fixing the problem. The state's obligation to properly fund k-12 and health care make cuts from other state funded institutes inevitable, unfortunately that means higher ed was sent to the slaughter house to be chopped up to fund these other necessities. The panel assured everyone of their worries about the cuts and the necessity to continue to fund higher ed but not many proposed solutions were talked about. I also was fascinated to hear about how cultural difference influenced politics within the state. As mentioned throughout this blog spot, Rep. J.T. Wilcox represents a rural community in Washington, and his constituents' values differ tremendously from those people that Rep. Ross Hunter represents (from an urban environment). No one denies that higher education is essential to climb out of this economic crisis which was reassuring to me, however, certain steps need to be taken to prevent more cuts from higher education and a rise in tuition. Educating the public on the importance was mentioned a lot and some reps even talked about raising taxes, but I question the sincerity of those remarks, especially in this economic climate. The seminar told me something I already feared, more cuts to higher ed are coming, but the light at the end of the tunnel is that there are things students and community members can do to help the situation. Persistence and communication between lawmakers and the people can help educate the public about the importance of higher ed and might spark action to solve the problem. Balancing the budget is no easy task, but cutting higher ed funds is not the answer; higher ed is the answer to restoring our community, state, and country to their former glory.

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    1. I too have a much better understanding of the budgeting process. I understood that we had a balanced budget requirement in this state. I think that is a good policy, especially in light of the budget problem we face nationally. What do you think some possible scenarios might be for improving the revenue situation in this state?

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    2. I agree with both you and Marc. Before this panel, I had no idea the intricacy of the state’s budgeting and everything that was involved. But it was great to see that there are representatives that are passionate about the work being put into the state including topics like higher ed. While many did not propose a firm resolution to the problem of tuition hikes, it was acknowledged that it is a great problem from our state.

      It was unfortunate to hear that there will be more cuts to higher ed, like you stated, but it was also comforting to hear that the actions we make to contact legislature really does help in the end. I believe it was Hans Zeiger that brought this up, encouraging us all to go out and become active participants. This really gave me an interest in becoming further involved to help the cause.

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  8. Tuesday’s seminar session we had in introduction to the challenges the Washington government and the legislative representatives face when managing a budgetary crisis. From this seminar, I understand that this budgetary crisis is not a bipartisan debate; rather it is a policy decision that must be managed collaboratively. There are geographical divisions between the east and west, specifically; there is a urban and rural divide in the state of Washington. Moreover, there is another divide between the counties of east and west King County. Marty Brown, the Director of the Office of Financial Management, pointed out that there are three main budgetary processes--operating budget (ex: medical), building budget (ex: the construction of buildings), and transportation budget (ex: building/managing of Washington roads, bridges, highways, ferries).

    Ross Hunter explained that biennium budget management is absolutely necessary because everything grows in changes and revenue is elastic (i.e. depending on the number of students that opt not to attend a public school, we can often save a lot on spending)
    One thing that stuck to me was that Rep. Hunter stated that there are three main budgetary lies. One is that there are assumptions that there is no revenue revival scheme; second, there are often fake cuts made that the federal law will through to gain a particular member’s vote, and third, representatives will often implement propositions that we know that the government will veto.

    I was surprised at the statement by Sen. Doug Erickson who stated that state tuition acted as a buffer, where raising university tuition rates was an easy place to take out money. Overall, I the panelists and the audience have a sense of recognition that it is difficult to have a fixed balanced budget that rests on a rubber band instead of a concrete base.

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    1. Well said Aman. I was also shocked that there is no revenue revival scheme. I am also a little confused about how state tuition is a buffer to the budget. I am starting to understand how this process works. I don't think it is fair that the state does in fact use the tuition as a buffer, but it is the most attractive option to the state. It is very clear that we must make difficult decisions in troubling economic times. Good post!

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  9. Good metaphor Aman. I think the construction analogy is a good one. Historically there has been broad bipartisan support for education in this country, especially K12. What I found interesting was the fact that republicans support higher education, but want it to run efficiently. And that democrats were conflicted when making cuts as they tend to support a broader set of social services. As such, higher education gets cut because other services such as mental health services are society's safety net.

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  10. Following the budgeting seminar, I asked House staff to research some statistics mentioned that seemed dubious to me. Rep. Hunter, in diminishing the value of the agriculture industry to the State of Washington and our residents mentioned that it contributed about 2% to the State economy. This is true only if you count commodities at their lowest value, much like counting Boeing's contribution at the value of the metal in the planes. Food and food processing make up about 9% of the state's economy. This sector also makes up nearly 18% of the state's exports, dwarfing every other sector except aerospace, more than triple the volume of either energy products or computers and software. I will be challenging Ross more strongly next time he says this.
    Representative JT Wilcox-2nd district

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  11. The Governor's budget Chief was moved to describe at length his view of how people just don't want to live in rural areas. This is demonstrably wrong, given the fact that my rural 2nd District was the fastest growing district in Washington over 10 years and that re-districting consistently found that urban districts were losing population to more rural districts. I was at a hearing in Walla Walla yesterday where testimony revealed an 11% growth in employment in this rural and small town area compared to the state figure of just over 1%. Truthfully, I have great respect for Rep. Hunter and Marty Brown, and they have been very kind to me as a freshman legislator, however I object to their urban, Medina and Olympia-centric view of the state.

    Rep. JT Wilcox
    2nd district

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    1. Thanks representative for following up on this, and your continued participation in the blog. What you point out is that if you simply take the value of the food commodities themselves, it doesn't reflect the entire picture. When one views the economic value of say, a Boeing, one certainly needs to include the value of the associated industries to form an accurate picture.

      We invite the other discussion participants to respond to these comments.

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