Locke orders budget cuts

By David Ammons

Associated Press

OLYMPIA — Gov. Gary Locke, faced with a $1 billion hole in the state budget, on Tuesday ordered all state agencies to prepare for major cuts this winter — perhaps 15 percent or more for the biggest departments.

Layoffs, a hiring downhold and possibly a salary freeze and reductions in aid to local government — but no general tax increases — were predicted by budget officials.

It was the first time the administration had clearly outlined the depth of budget cuts it plans to propose to the Legislature in December. Washington’s projected shortfall is among the largest in the nation since the terrorist attacks and the economic slump hit last month.

Shortly after the Sept. 11 attacks, the state’s largest private employer, The Boeing Co., announced plans to lay off as many as 30,000 workers, many of them in Washington. Economists began forecasting at least a mild, brief recession.

If the revenue update in November chops another $700 million out of the projected tax receipts, Locke and the Legislature will face a $1 billion shortfall this winter. They already have $300 million in unpaid bills, in part because of higher-than-expected public school enrollment.

The administration began rewriting the budget Tuesday. Locke directed six agencies to prepare plans for cutting their budgets for the upcoming fiscal year by 15 percent.

The budget cuts under discussion would save $577 million.

The Big Six include the Department of Social and Health Services, the prison system, the departments of Ecology, Health, Fish and Wildlife and the trade agency.

"This is the guts of the state budget, folks," said state budget Director Marty Brown.

All other agencies, including higher education and departments run by separately elected officials or commissions, were asked to submit their plans for efficiencies, although no specific dollar targets were given. If they don’t cooperate, the state budget office will make the budget recommendations without their suggestions, Brown said.

The administration still plans to balance the budget without general tax increases, he said. But he said tuition hikes for higher education and various fee increases may be required.

Brown said employee layoffs are inevitable and that second-year salary increases for teachers and public employees will have to be on the table.

State aid to education, which accounts for nearly half the budget, is protected by the courts, and lawmakers have been reluctant to chop higher education budgets. That means social services are in line for the most dramatic reductions.

"It’s going to be difficult for us and it will be difficult for the people who need a lot of services," said Dennis Braddock, secretary of Social and Health Services. "We cannot get that kind of cutback by just cutting around the edges."

The agency’s target: $474 million, out of a $3.2 billion appropriation.

"There’s going to be damage," Braddock said.

Some possible cuts include adult dental services and indigent medical care, except for emergencies, and help for single unemployed people who get General Assistance-Unemployable welfare, he said.

Brown said agencies already have taken any easy cuts, such as travel, equipment and training. The current budget already included about $306 million in cuts, largely by requiring agencies to "eat" the effects of inflation, he said.

Brown said agencies were warned not to just propose cutting popular programs, like padlocking state parks. The budget office and Locke’s policy advisers will be taking an independent look at each agency’s mission and spending, he said.

Locke wants agencies to consider whacking whole programs, rather than merely "thin the soup" with across-the-board cuts, Brown said.

The cutback plans are due later this month. The Locke cabinet will have a retreat next month to refine proposals and after a revenue update on Nov. 20, the governor will prepare a new budget to send up to the Legislature.

The Locke budget is due out Dec. 11. The Legislature convenes in January and will make the final decisions. Most of the cuts will take effect in the fiscal year that begins next July 1.