When $1 is really $4. Or $5.

Last month when Gov. Chris Gregoire unveiled her proposed 2009-2011 budget, she urged lawmakers to write a supplemental budget as soon as they possibly could. Cutting money from the remainder of the 2007-2009 budget, she said, would save even more money long-term.

During Legislative Assembly days, I talked to Sen. Joe Zarelli, a Republican budget-writer, who told me that $1 cut in the supplemental budget is equal to $3 or more down the line.

And yesterday at the AP Legislative Forum, several lawmakers repeated the sentiment, if not the exact equation.

So, how does $1 become $4?

There are about six months left in the 2007-2009 biennial budget. So if you were to make a permanent $1 cut from an ongoing expense in this six-month period, that would result in an additional dollar-per-six-months the subsequent biennium. In a 24-month biennial budget, that means four six-month chunks of time. And that means more savings in the next biennium – maybe even $4. (The actual amount depends on the program or service, the type of cut, and many, many other factors.)

The 4-for-1 math doesn’t apply, for the most part, when 1) the cut isn’t permanent or 2) the cut is made to a one-time expenditure.

To put it very simply: Deciding not to buy your usual bottle of water will save you $1 on today’s grocery bill. Deciding never to buy water again will save you $1 every time you go to the store.

Got a question about how something in the Legislature works? E-mail me here: nikis@tvw.org.

Tags: Budget