According to the anti-Gregoire Dino Rossi political flyer I received in the mail today:

Gregoire inherited a strong, growing economy and by March of 2007, state coffers were bursting with a $2 billion surplus.

…Gregoire turned a record surplus into a $2.7 billion deficit.

Of course there were no citations from where these “facts” came from, so I did some digging to present the real truth in the numbers.

First a few definitions. A yearly budget deficit is the difference between the tax revenue a government entity brings in for any given year, and the amount of expenditures for the same year, when the expenditures are higher then the tax revenues. The total debt is the amount of leftover unpaid and accumulated deficits from prior years. There is a minor twist. Government agencies often under report and lie about annual deficits. But they are honest about the cumulative and total debt. So the easiest way to calculate the REAL yearly deficit is to subtract the total outstanding debt from one year to the next. The outstanding debt for Washington state can be seen by looking at the outstanding and unpaid bonds that were issued to finance the yearly deficits in Washington state.

On to the numbers. Here is a history of the total outstanding Washington state debt, directly from the source - Washington State treasury website. The image below is from the debt management summary link.

From the image above, it is crystal clear to me that the total outstanding debt of Washington state has increased every year since at least 2000. The annual budget deficits of Washington state can be calculated by subtracting the outstanding debt from one year to the next. Dino Rossi has apparently not seen this, or just does not understand the numbers, because his fliers mistakingly report record surpluses that Gregoire inherited in 2007. In fact, for fiscal year 2007, Washington state had a $1.089 billion DEFICIT (11,673-10,584).

The real mystery here is how I will cast my vote for Washington state governor. Do I vote for Gregoire and her budget deficits, or do I vote for Rossi and his confusion on all things economics? It’s going to be a tough choice, and I may need the assistance of my magic 8 ball.

For related reading on Federal Government budgets:

Also check out this excellent book:
Bad Money: Reckless Finance, Failed Politics, and the Global Crisis of American Capitalism
Bad Money: Reckless Finance, Failed Politics, and the Global Crisis of American Capitalism by Kevin Phillips