State budget quandary unveiled

Associated Press

OLYMPIA — Gov. Gary Locke, facing the toughest financial dilemma in his long years as a budget writer and governor, plans to offer his revised budget proposal Tuesday.

The plan Locke will send to the upcoming legislative session will bridge a $1.2 billion budget gap that developed when the state and national economy dipped into recession. Locke’s plan will include service cuts and layoffs, use of federal bailout dollars and state reserves and, lawmakers expect, heavier reliance on gambling revenue.

Significantly, Locke is not asking for a general tax increase.

Locke, who was state House appropriations chairman for years and enjoys a reputation as a budget expert, found it extraordinarily hard to write this one, spokeswoman Dana Middleton said.

"He cares deeply, deeply about a lot of those social programs and it was a very difficult moment for him. It was agonizing at times," she said in an interview Monday.

"I don’t expect there will be anything to like about it," said Senate Majority Leader Sid Snyder, D-Long Beach. "That’s true of what the Legislature will produce also. It’s not going to be pretty."

House Co-Speaker Clyde Ballard, R-East Wenatchee, said he has been deeply disappointed in Locke’s budget decisions in recent years and will be watching closely to see if his newest version is truly balanced.

"If anyone plays games, it will wreak havoc," he said in an interview.

House Majority Leader Lynn Kessler, D-Hoquiam, called Locke’s budget "the opening shot" and said it will draw opposition from across the spectrum because it spells out the depth of the state’s financial problems and the ugly choices that are required.

The governor’s budget will include:

  • Cuts: Locke is proposing cuts in virtually every sector of the budget, said budget spokesman Ed Penhale.

    Legislative sources said a late draft included 5 percent cuts at the four-year colleges and 3 percent cuts for the community colleges, to be offset by local-option tuition increases.

    The heaviest cuts were expected in social and health programs, since that’s where the largest chunk of discretionary income is spent. In preparing for the new budget, Locke asked the Department of Social and Health Services to propose 15 percent spending cuts. The recommendations included eliminating some programs entirely, including welfare for single employable adults.

    State employees and teachers will be asked to pick up a greater share of their health insurance costs, despite strong opposition from the unions, lawmakers said.

    Locke also could save $125 million by not using the general treasury to pay for transportation projects and ferry aid, the Washington Federation of State Employees and other groups said.

    Penhale said Locke is shielding about half of the budget from cuts, including basic-education grants, teacher pay increases, class-size reduction funds, pension contributions and debt service.

  • Reserves: Locke is expected to dip heavily into the state’s "rainy day" fund, which has $384 million socked away.

  • Federal money: The administration assumes that more than $400 million in new federal Medicaid money will flow to the state in the next year. By one estimate, Locke will presume that half of the money will arrive in time to help balance the budget. Other federal money, including economic stimulus funds and reimbursement for anti-terrorism efforts, also could help.

  • Gambling: Locke didn’t tip his hand, but a number of lawmakers expect him to propose generating revenue by taxing various forms of gambling, authorizing and taxing electronic slot machine-like games, and joining a multistate lottery.

    "I think gambling is a horrible way to finance government, but in the situation we’re in, I’d never say never," Snyder said in an interview. "It might be the best of the worst alternatives."

    Copyright ©2001 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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