Heading into my second time period as state treasurer, I’ve seen firsthand how the proficient public servants on this workplace maintain our state authorities operating successfully. Our staff has refinanced state debt to save lots of taxpayers practically three-quarters of a billion {dollars} in future prices whereas setting file funding returns — producing over $2 billion in new cash for state and native governments within the final fiscal yr.
Washington holds Moody’s high credit standing (Aaa). U.S. Information simply ranked our state first in the nation for long-term fiscal stability. Washington’s pensions are one in every of America’s best-funded and our finances by means of the tip of this fiscal yr is balanced with cash in reserves.
That is the robust basis we’ll must climate what’s coming.
The co-architect of Mission 2025, Russ Vought, was nominated to once more lead the White Home Funds Workplace and has stated in his affirmation hearings he’ll block cash to states as President Donald Trump needs, even when holding up funds violates the regulation and can of Congress.
When the president unlawfully withholds congressionally approved funds, he’s forcing his will on the individuals of a state faster than courts can rule in opposition to it. The primary wave of government orders has already examined the bounds of presidential authority.
Whereas there isn’t a perfect second for a president to unilaterally inflate their authority, the timing for Washington is very difficult because the Legislature faces a multibillion-dollar hole in its subsequent finances.
It will require disciplined finances crafting in Olympia as legislators fastidiously contemplate a broad vary of choices to deal with the hole. Nevertheless, what can’t be an choice right now is depleting our state reserves, that are vital for our monetary energy and state sovereignty.
Wholesome reserves defend us from financial volatility and, as was the case in latest reminiscence, unprecedented occasions like a world well being disaster. I’m grateful that the Legislature adopted state treasury suggestions to replenish reserves after the COVID-19 financial recession. This helped safe Washington’s monetary standing. Now our reserves will assist defend in opposition to federal coercion.
I’m heartened that Gov. Bob Ferguson’s introduced finances priorities name for guaranteeing robust finances reserves. My workplace continues to recommend we keep a reserve level of no less than 10% of revenues to keep up our robust credit score — a minimal stage that’s met by all however two states.
To make sure, no state has the reserves to completely change federal funds — within the 2024 fiscal yr, Congress despatched $27.4 billion to Washington. However we should have adequate financial savings to thwart any effort by the president to affect our state by unlawfully blocking or delaying congressionally directed funds.
Coercive threats have already been made to withhold catastrophe help in California, as was the case right here in Washington after the devastating Palouse fires in September 2020. Final week, the Trump administration recklessly blocked congressionally approved funds to states.
A multibillion-dollar budgetary shortfall might really feel like a wet day, making it tempting to faucet reserves. However the true storm clouds are on the horizon.
To maintain Washington financially steadfast and ready for the following 4 years, I urge state leaders to keep up our reserves. If we’re dedicated to defending Washington’s values and pursuits, we should protect this foundational protection.
