| HeraldNet - Snohomish County's online news source |
 SUNDAY, MARCH 21, 2010 8:13 am |
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Local News 
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State budget's $2 billion hole will require deep cuts Gov. Chris Gregoire must find ways to make budget cuts to meet a tax revenue shortfall expected to top $2 billion. OLYMPIA — Washington's budget hole is getting deeper, and today state leaders will find out how much.A new economic forecast due out this morning will show the recession's squeeze on consumers continues to starve the state of tax revenues and a shortfall that's been growing for months now likely tops $2 billion. Update: Click here to see the new forecast. For Gov. Chris Gregoire, the precise figure will represent the amount of red ink she must erase in her 2010 supplemental budget expected out the week of Dec. 7. By law, her spending plan must plug that gap without counting on new revenue from tax increases. That means making cuts in the current budget, a position she found herself in a year ago at this time. Except now there's even less fiscal fat to trim from. “It's not nickel-and-diming around the edges,” she said, referring to hundreds of small cuts made earlier this year. “If we have discretion to eliminate (a program) it is on the table.” She dramatized the magnitude with a PowerPoint presentation showing that even if she does the unthinkable, it won't save enough. For example, closing down Washington's penal system would save about $800 million a year, according to her budget office. Or if she proposed ending state aid to the University of Washington and Washington State University, it would free up $493 million in the fiscal year that runs from July 1, 2010 to June 30, 2011. If she also shuttered the state's 34 community and technical colleges, that would produce another $643 million in savings. “You can't close down every prison. You can't close down all mental health services. You can't close down all state-funded services. It's just not practical,” she said. To find the $2 billion, she's regularly huddling for hours with her senior staff, budget analysts and agency directors trying to figure out what to keep and what to discard. This Saturday, they'll again gather in a large conference room to pore through spreadsheets detailing savings from potential cuts. They'll also debate the effect each move might have on a person, a business or a community. While every year, a chunk of state tax dollars are untouchable, this year there are far less of them in play. Some spending is mandated by the state constitution, such as providing basic education, or is required by law, such as paying debt on bonds. Also, there is a batch of health care, human service and education programs that survive on a diet of state dollars matched by federal funds. In 2010, those federal strings are tied around even more dollars because of the recovery act. Congressional rules bar states from reducing their spending on any program for which stimulus money is received. Added up, about 70 percent of the state's general fund can't be touched in 2010 leaving the governor and lawmakers to find $2 billion in savings out of a $9.3 billion pot. Gregoire may plug some of the hole with reserves. And she may suggest transferring a few dollars from the capital budget; last year nearly $800 million got shifted in this manner. Congress is talking about pumping in more federal aid to states though it won't happen before Gregoire puts out her budget. As a result she said she's focused on making it up through cuts. That doesn't leave a lot of fiscal wiggle room for her and the Democratic-controlled Legislature in the 60-day session that begins Jan. 11. “This is going to take the legislators to spend every waking moment they're here thinking about the short term consequences, the next biennium and the long term impacts,” Gregoire said. Sen. Margarita Prentice, D-Renton, chairwoman of the Senate budget committee, said that this may be the most difficult and challenging year she's faced. On Wednesday, she said Democrats are feeling in a slightly better starting point than a year ago because they've been in close contact with the governor. “I'm not feeling as stressed because our communication is so much better,” she said. “It is going to be painful. But we'll get through it. We just have to act like grown-ups.” Jerry Cornfield: 360-352-8623; jcornfield@heraldnet.com. |
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