Locke, lawmakers ready to cut deep
Published 9:00 pm Saturday, October 27, 2001
By David Ammons
The Associated Press
OLYMPIA — The budget knives are out.
After a fat-and-sassy decade of tax cuts, generous budgets and sizable surpluses, Washington state government suddenly faces the grim reality of mounting financial woes that could easily top the billion-dollar mark.
Gov. Gary Locke and lawmakers, skittish after a steady drumbeat of successful anti-tax initiatives, are looking at big spending cuts to fill the gap.
Everything from health care and parks to education programs and services to the poor will be on the line. Layoffs are inevitable, and a salary freeze for public employees may be coming.
"We’ll patch something together that is horrible and unacceptable and will cause grief to future legislatures … and then get out of town," says Senate Majority Leader Sid Snyder, D-Long Beach.
This week, the largest state agencies must submit plans for 15 percent spending cuts. Led by the Department of Social and Health Services, the six departments must show ways to slash $577 million.
"It’ll be quite a shock to a lot of legislators," says Dennis Braddock, a former House leader who now heads DSHS.
"The cupboard is pretty bare," says Maureen Morris, a former Locke budget deputy who now is trying to help counties devise bare-bones survival plans to follow if worst-case scenarios come true.
"We need to really pare back government spending as quickly and as deliberately as possible," Locke said in a recent interview.
How could a prosperous state with a billion-dollar surplus just a year ago plunge into the tank like this?
The short answer: It’s the economy.
The longer answer:
Counting the loss of spinoff jobs in other companies, the state budget office estimates a total job loss of 45,000, for a loss of $3.5 billion in personal income in this budget period. That translates into a tax loss of $600 million or more.
Added to this are more than $300 million in unpaid bills due to more kids in school and more convicts in prison, the impact of citizen initiatives, the House’s decision not to tap pension reserves, forest fire costs and huge legal judgments against the state.
Locke and others peg the total problem at $1 billion. The Senate uses $1.1 billion as its estimate; House Budget Committee co-chairman Barry Sehlin, R-Oak Harbor, says it could hit $1.5 billion.
"It’s not saber rattling or scare tactics at all," Sehlin says. "It’s obviously alarming."
Since the Legislature is not in session, the initial response is up to Locke. He has directed agencies to freeze most new hires and cut back on travel, equipment purchases and so on.
More significantly, the budget office is preparing budget cuts to submit to the Legislature. This week, six large agencies turn in their plans for 15 percent spending cuts.
Most of those cuts would come from DSHS, which provides a wide array of social programs and health benefits to the poor, elderly, children, and the disabled — 1.3 million clients in all.
"It’s the Willie Sutton school of bank robbing — that’s where the money is. We have to go there," says state budget director Marty Brown.
The agency is expected to propose service cuts, such as adult dental and vision care, and to make Medicaid available to fewer people. The state has one of the country’s most generous programs, and cuts will be necessary both to get through the near-term financial crunch and to survive in the 2003-05 budget cycle, Braddock says.
The education budget is largely protected, although some of Locke’s pet programs could be on the chopping block. Locke also wants to largely shield higher education, which has been ramping up enrollment to meet soaring demand over the next decade.
That means social services, the largest unprotected chunk of the budget, will take the brunt of cuts.
The governor will use the November revenue update in drafting a budget to send to the Legislature, which convenes Jan. 14. The cuts take effect July 1.
"It’s going to be extremely tough; we all have our pet programs," Snyder says.
Locke is asking his cabinet to use a little ingenuity. Some sample ideas:
So far, though, the governor isn’t talking about tax increases.
That doesn’t mean it won’t be on the table, at least for discussion, before it’s over. State Sen. Jim Hargrove, D-Hoquiam, is floating the idea of a temporary sales tax surcharge of three-tenths of a percent as a way to compensate for the terrorism-related damage to the economy.
No bandwagon, so far.
"The last thing families need is to have government increase their tax burden," says House Co-Speaker Clyde Ballard, R-East Wenatchee. "We need government to live within its means, just as families must do during these difficult times."
Sen. Don Carlson, R-Vancouver, and others say it will be part of the conversation, but only as a remote possibility. "You have three choices: tax increases, programs cuts, or some combination. There are no other choices," Carlson says.
Employee unions, anti-poverty advocates and others hope the tax idea gains traction.
"We simply need something to get us over the hump" rather than slashing the state payroll and freezing salaries, says Greg Devereux of the Washington Federation of State Employees.
Deep spending cuts are premature, he says.
"It behooves us to look at temporary solutions to what we all know is a temporary problem," says poverty activist Tony Lee. "We all know the economy of the Northwest is basically very sound and will rebound.
"When we go into a downturn, the need for services increases, not decreases. This is not the time to cut back, but to step up to our responsibility to the elderly, the disabled and the children of this state.
"When you talk about cutting a billion, that is very, very scary."
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