Gregoire: Washington “dodged a bullet,” but it’s not over

Gov. Chris Gregoire just started her press conference on the next steps for the state budget. You can watch live on TVW now and follow-along here.

She said recent federal legislation will kick in more than $200 million for education. “With the receipt of this money we were able to dodge a bullet,” she said, but the budget remains “under stress.”

She said in the spring there were positive economic signs, but “we must continue to be fiscally responsible” as the economy takes a step back. “It’s pouring down rain and so we have exhausted our rainy day fund.”

“Today I’m laying out four directives” to address the step back, she said. “I am directing my state agencies to prepare for across-the-board cuts from 4 to 7 percent,” effective Oct. 1 and based on the September forecast.

“Second, I’m asking agencies to prepare for a supplemental budget,” she said, by looking at $500 million of cuts from the current budget. She wants a supplemental budget ready for the Legislature in January.

Third, she said, she wants to prepare for the 2011-2013 budget, with a projected $3 billion shortfall. To that end, she’s asking agency heads to submit proposals for what they could cut.

“Finally, I’m taking action today to reduce spending in our welfare-to-work program” by more than $50 million. She said enrollment has surged in that program but federal funding has remained flat. “Fewer families will qualify” for extension of benefits, programs to help families stay in jobs and more. “Cuts are really just not a bunch of numbers.”

As to that 4 percent cut, she said here’s what it might look like:

Department of Revenue laying off staff, Department of Corrections closing another prison, hospice services eliminated, levy equalization reduced, 9,000 students turned away from community and technical colleges.

Gregoire shared stories of several unemployed workers in the state of Washington, including a 62-year-old in a retraining program whose unemployment benefits ran out, leaving him unable to afford gas to get to class.

Gregoire said the committee to transform Washington’s budget has heard from many people across the state. She’s challenging them to bring forward transformative ideas. “We have no choice. We must transform our state government. We must, however, in the process maintain those values” of the state. “We will continue to find ways to deliver services as efficiently as we can… we will survive this crisis and we will be stronger for it,” she said.

Now, questions. Gregoire was asked why wait for October to make across-the-board cuts? Why not make a smaller cut now?

Gregoire said the state’s economist, Arun Raha, can’t predict yet what the September forecast will say. She said the state needs to get ready for cuts and must know how big the problem is before implementing cuts. “I want them to be ready effective Oct. 1 but I’ll give them a specific number” after the September forecast.

What would a 7 percent across-the-board cut mean? “We’re going to see the end of programs, not a cutting of a program but the end of programs. No more podiatry, no more dental services, no more vision services,” she said of state healthcare programs.

What about schools? They have to have teacher contracts before school starts — how do you make cuts after that? Gregoire said schools will also lose levy equalization money, so many schools will get hit two ways.

Tags: Budget, Gregoire