Gregoire budget starts with $2 billion in cuts, but will tax increase follow?

OLYMPIA — Facing another crippling budget deficit, Gov. Chris Gregoire on Thursday outlined $2 billion in reductions in state spending she says will cut painfully “through the muscle and into the bone” of public services.

Now, in the days leading up to next month’s special legislative session, she’ll consider ways of raising revenue to ease the pain without damaging the fragile economy. But she insisted she may not commit to any ideas, including putting a tax package on the ballot next year as desired by some Democratic lawmakers.

“I have not thought about revenue,” Gregoire said at a news conference Thursday.

What she said she’s focused on in recent weeks is how to plug the hole in the two-year budget that runs through June 30, 2013. Right now it is projected to be $1.4 billion. However, Gregoire came up with $2 billion in reductions to re-establish a reserve.

Her proposals would slash funds for higher education, make classes larger in public schools and ax dozens of health care and human service offerings.

She called for the state to shorten the length of time convicted criminals are supervised upon release, end a subsidized health insurance program for the poor, cut back levy equalization payments and stop sharing liquor revenues with cities and counties.

In all she proposed $1.65 billion worth of savings by cutting or eliminating 165 programs and services. Another $330 million is saved in an accounting maneuver by delaying an apportionment payment to elementary and secondary schools until the first day of the next two-year budget in 2013.

“I said the work of slashing our budget by another $2 billion would be dreadful, and that’s what it is,” Gregoire said. “Citizens are not going to get what they need from our state government because we simply cannot afford it. While my heart is there, my pocketbook is empty.”

State lawmakers will get Gregoire’s list in advance of the special session that begins at noon Nov. 28. The governor also intends to send them her full supplemental budget proposal before that date.

She hopes having all the information beforehand will help them to pass a new budget in the extra session that can run 30 days and not delay action until the 2012 regular session.

It won’t be easy. Most of the cuts suggested by the governor are ones lawmakers considered and rejected in their regular and special sessions earlier this year. Several Democrats in the House and Senate are now pushing for any deal to include new or higher taxes or ending tax breaks. Some want it all to be folded into a tax package.

Republicans are dead-set against any tax increases. However, they have reportedly asked the governor to approach negotiating with casino-owning Indian tribes for a share of gaming revenues.

Gregoire said she’s received ideas from Democrats and Republicans but wouldn’t disclose any specifics.

Rep. Ross Hunter, D-Medina, chairman of the House Ways and Means Committee, said his budget committee will consider the question of new money, but no decision has been made in his caucus on whether to pursue anything

In the meantime, voices on both sides of the debate spoke out Thursday.

Remy Trupin, executive director of the Washington State Budget &Policy Center, urged eliminating “ineffective” tax breaks, reforming the sales tax and imposing a new tax on capital gains.

“The plan rolled out by the governor this morning is absolutely the wrong direction for Washington state,” he said in a statement. “Policymakers must take a balanced approach. We need to raise revenue now to address our immediate needs and make structural changes so that our revenue system is adequate and sustainable in the long-term.”

Jason Mercier, director of the Center for Government Reform at the Washington Policy Center, said with consumers not spending and business owners not hiring because of a lack of confidence in the economy, new taxes may make matters worse.

“The exercise the governor’s gone through and what the Legislature is going to go through needs to be focused on assuming no new revenues and the best investments we can make with the revenue we have coming in,” he said.

The difficulty of crafting an all-cuts budget didn’t buffer Gregoire from criticism of the choices she made.

Such is the case with education, where she cuts $150 million in payments to mostly rural schools through levy equalization and saves $137 million by adding two students in each class in fourth through 12th grades.

“I understand why the governor must propose cuts and that this is just the beginning of the conversation, but these cuts can’t happen,” Superintendent of Public Instruction Randy Dorn said in a statement. “These cuts would just make the situation worse in our schools.”

And her suggestion of supervising sex offenders for two years and all other offenders for only 12 months concerns law enforcement.

“These cuts are extremely dismal,” said Don Pierce, executive director of the Washington Association of Sheriffs and Police Chiefs. “We can’t pretend this isn’t going to have an adverse impact on community safety because it is.”

All the cuts considered by Gregoire can be read at

Jerry Cornfield: 360-352-8623;

What’s next

• Nov. 17: Chief economist Arun Raha issues revenue forecast

• Week of Nov. 21: Governor releases supplemental budget proposal

• Nov. 28: Special legislative session begins

• Jan. 9, 2012: First day of regular session

On the chopping block

Gov. Chris Gregoire targeted 165 programs and services for funding cuts or total elimination. Below are a few items which generate large savings. To see the full list, go to

• $166 million — Reduce funds to community colleges and universities

• $150 million — Cut levy equalization payments

• $137 million — Increase class size by two students in grades 4-12

• $110 million — End medical services for Disability Lifeline

• $50 million — Reduce funding for subsidized child care for low-income families

• $48.1 million — Eliminate Basic Health Plan

• $37 million — Cut legislative and judicial agency funding by 10 percent

• $36 million — Reduce state share of employee health benefit costs

• $30 million — Reduce eligibility for long-term care services

• $27 million — Reduce length of supervision of all offenders

• $18 million — Early release of inmates

• $14.5 million — Eliminate state food assistance program

• $11.7 million — End non-emergency dental care coverage for persons with development disabilities, in long-term care and pregnant women

• $9.9 million — Eliminate prescription drug coverage for Medicaid clients

• $5.1 million — Close two state hospital wards for dementia and traumatic brain injury

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