Just before Thanksgiving Day, Gov. Chris Gregoire appealed for legislative help slicing the state budget. The immediate problem is a $900 million shortfall in the current fiscal year. In September, she addressed a $520 million problem with across-the-board cuts.
But the November revenue forecast deepened the hole by $385 million. Another across-the-board cut won’t do. Now, she says, it’s time for smarter, more strategic reductions in state spending.
Well, it’s been time for a while. But after an unfortunate election night misstep when she said she didn’t have a “path forward” on the budget, Gregoire has acted decisively to confront the fiscal crisis. Voter rejection of new taxes, combined with the reinstatement of supermajority requirements for tax increases, closed more than a few escape hatches. Then came the sharply reduced revenue forecast.
So Gregoire’s now showing the “get ’er done” resolve the situation requires. We’ve seen this side of the governor before, perhaps most clearly in the lead-up to the 2009 legislative session. Shortly after winning re-election in 2008, Gregoire rejected tax hikes, despite a looming $5 billion deficit. Recognizing the importance of trimming spending to match economic reality, she held her ground, albeit without enthusiasm. In the end, she largely prevailed.
Unfortunately, the commitment was transitory. Gregoire and lawmakers responded to the deepening recession by looking for a tax fix in 2010. Now, she writes legislative leaders, “… we have all run out of time.” Failure to make necessary reductions now makes a bad situation worse.
She has called on state employee unions to renegotiate existing collective bargaining agreements. With the revenue dip, the current contracts are “financially infeasible.” Resetting compensation is an obvious step, but there’s no indication the unions are in a give-back mood. And, unless they agree to changes, the agreements stand.
Gregoire also unveiled her cut list. She would eliminate the Basic Health Program, delay funding college financial aid, reduce levy equalization (which gives money to property-poor school districts), cut funding for programs for gifted students, and eliminate K-4 enhancement programs. There’s more. Ten million here, fifty million there, she wrenches hundreds of millions of dollars from the last half of the fiscal year ending June 30, 2011.
Her proposal also includes $316 million in gimmicks, delaying payments to others — school apportionment and financial aid funding. These tricks should be retired. And they probably will be when lawmakers take up the nearly $5 billion shortfall in the 2011-13 budget cycle. That’s what “we’ve run out of time” means.
Gregoire stopped short of calling for a special session. Republican leaders have urged her to bring lawmakers together for a one-day session, scheduled to coincide with legislative meetings already on the calendar in December. So far, Democrats have not come on board.
In a statement responding to the governor’s letter, Sen. Majority Leader Lisa Brown called the proposed cuts “numerous, deep and … painful.” Underscoring the difficulty Gregoire faces in finding swift consensus, Brown says the budget challenge is not “a math problem” and argues for maintaining social service and education programs.
“Cuts will no doubt be necessary,” Brown concedes, “but I believe there are reforms we can make within government that can also achieve significant cost savings.”
No doubt. But cost-saving reforms inevitably require reductions in labor costs through downsizing, reducing compensation, or contracting out; shedding non-essential services; and getting control of health care costs. The governor and Republican reformers will surely welcome leadership from the Senate Democrats in pursuing these ideas next session. But you can’t bank the savings in time to solve the current-year problem.
Gregoire asked legislative leaders to get their suggestions to her quickly. The Democratic majority, as Brown’s comments suggest, can be expected to balk. A bipartisan coalition, however, may come together to approve responsible budget reductions.
That’s where Gregoire’s leadership will be critical. The governor has undeniable clout in Olympia, institutional power she seems reluctant to use. She’s advanced a budget plan. It’s not pretty. It is responsive. And, after months — years — of legislative inaction, it’s probably as good as it gets.
Now she needs to call the special session, stay engaged, and use her influence to get the job done.
Richard S. Davis, president of the Washington Research Council, writes on public policy, economics and politics. His e-mail address is richardsdavis@gmail.com.
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