I usually try to avoid getting into political issues on here, but something has come up that I simply cannot ignore. A few days ago the Seattle P-I posted videos from Christine Gregoire and Dino Rossi where each candidate makes the case on why you should vote for them. As I was watching Christine Gregoire’s 4-minute pitch, I was dumbfounded by the egregious claims she was making regarding the state budget.
Since housing has been such a large part of the state economy over the last few years, I have been paying attention to these issues for some time now. Frankly, I am appalled that Christine Gregoire would make the blatently false statements she offered in her video as reasons to vote for her, and I feel that it is relevant to bring them to light here.
Christine Gregoire claims that she single-handedly took a $2.2 billion projected deficit for the 2005-2007 biennium and turned it into a surplus.
Reality: The budget practically balanced itself.
Two-year state tax revenues increased $5.3 billion between 2005 and 2007 (source: Washington State Department of Revenue), thanks to the booming economy including huge increases in property tax and real estate excise tax collections. Meanwhile, Gregoire has increased spending by $8 billion (source: Seattle Times). The budget was balanced despite Christine Gregoire, not because of anything she accomplished.
When discussing the projected $3.2 billion deficit for the 2009-2011 budget, Christine Gregoire puts the blame on George Bush.
Reality: Gregoire ignored repeated warnings from the state’s top economist that the housing-fueled boom in the state economy was temporary and revenues would be returning to lower levels soon.
Here’s what Washington’s Chief Economist ChangMook Sohn was saying while Gregoire was increasing spending $8 billion in four years:
November 2005 – “There are many signs that housing is peaking.”
June 2006 – “We can’t assume that this hot economy can continue into the next biennium.”
November 2006 – “The expected cooling of Washington’s once-torrid housing and construction sector is under way.” (AP paraphrase)
September 2007 – “Some slowdown is inevitable.”
Christine Gregoire says that she “‘inherited a 2.2 billion dollar deficit.” In reality what she inherited was a booming real estate market that helped total tax revenue to increase by 22% in just three years. However, because she ignored the advice of Chief Economist Sohn, the state must now make difficult cuts such as a hiring freeze (source: Seattle Times) and an across-the-board one percent cut (source: Seattle Times).
Furthermore, does anyone remember back in January, when Gregoire said this:
I’m struggling to get the message out to Washingtonians. The economy is strong. Buy your home. There is no good reason for a slowing of home purchasing in the state of Washington today.
Since Gregoire gave the advice that everybody jump into a declining housing market, median prices have declined 7%, state unemployment has increased 33% from 4.5% to 6.0%, the stock market has fallen 20%, and the failure / sale of WaMu has caused our state to lose its only major national bank. If anyone actually jumped into the housing market based on Gregoire’s advice in January, they’re probably wishing they hadn’t right now.
I bring these things up not to tell you who to vote for, but simply to point out the nonsense malarkey that Gregoire has been spouting regarding the state budget. The bottom line is that during the boom years she had the choice to exercise caution and restraint or to go on a spending spree. She chose the spending spree despite the warnings of Chief Economist Sohn, and now we’re facing the consequences.