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

Gov. Chris Gregoire will announce tomorrow at 11 a.m. what her next steps for the state budget are, and TVW will be live with the press conference.

Gregoire will discuss her budget plans for both the short- and long-term — including the 2011-2013 biennium, according to the press release.

Tune in tomorrow — both here on the blog and by watching TVW.

Tags: Budget, Gregoire

Jordan Schrader at The News Tribune has a post about the likelihood of a special session to patch the potential $480 million hole in the state budget.

Schrader says that early this week, Gregoire will talk to legislative leaders to determine if a special session is the way to go.

The $480 million hole is still “potential” because it all depends on whether Congress passes an extension of support for FMAP — the Federal Medicaid match. The state banked on that money while writing the supplemental budget in the 2010 session, but Congress hasn’t yet approved it.

Tags: Budget, Gregoire, special session

Just a reminder: Today, many state agencies are closed. For a full list, go here.

Employees at those agencies will not be paid — they’re temporarily laid off. The 10 closures this biennium will save tens of millions of dollars and were used to help balance the budget.

Tags: Budget, state closures

Gov. Chris Gregoire is in Washington, D.C. today with a group of other governors to ask Congress to pass an extension of the Medicaid match program, or FMAP. If Congress doesn’t pass the extension, Gregoire said she’d either have to call a special session or make across-the-board cuts.

The extension — for the first two quarters of next year — would amount to nearly $500 million for Washington. Moreover, that money has already been “banked” by the budget passed this session. Gregoire and lawmakers said that since the Senate and House had both passed bills that included the match and it was included in Obama’s budget, they thought it was a safe assumption.

In a conference call with reporters, Gregoire said all-day kindgergarten and hospice programs would be on the chopping block without the FMAP extension. She said the $480 million would equate to about 6,400 jobs or a 4 percent across-the-board cut to state programs.

“The message from governors is that we have every expectation that there will not be federal dollars in the next biennium but we need them to finish out this biennium as they began it,” she said. The current biennium ends July 1, 2011. The current Medicaid match is scheduled to end at the end of 2010, leaving two quarters of the fiscal year without the match.

Gregoire said FMAP funding would help avoid a double-dip recession. As for whether she would call a special session, she said she would only do that if she had assurances the Legislature would convene, make cuts and leave within a day.

Tags: Budget, cuts, FMAP, Gregoire

“Today we are announcing a significant new effort in how we’re going to create our budget,” Gregoire said, starting out her announcement. “We are seeing hopeful signs in our economic recovery but quite frankly, we are also seeing that things are not going to get back to the way they were anytime soon.”

She said in the first five months of this year, the state has added 14,000 new jobs — but that doesn’t hold a candle to the jobs lost. “Credit is tight for our businesses and tighter than it was two years ago.”

As a result of the economic crisis, she said, state revenues are down. When the 2011 Legislature meets, they’ll face a $3 billion projected shortfall.

“Today must mark the start of something different,” she said, to “think differently, to ask our questions in a new way.” She said tough choices aren’t new to the state, which has cut $5.1 billion in spending over the past two years.

She said the changes aren’t just about the process, they’re about building a strong financial foundation. “It’s about transforming government to meet the needs and the economic realities” of the future.

So: She wants to reform budget writing. “There are no sacred cows. We’re going to ask new and challenging questions” about state programs. “In addition to the rigorous budget process, I’ll challenge our state agencies” to go beyond “priorities of government” budgeting and consider fiscal responsibility, performance and efficiency.

Those three additional areas each have several questions. Example: Is this an essential service? If so, is it something that can be provided by others. “Could Washington State Ferries be managed by an outside organization,” she asked, by way of example. She said many ferry services are private run or on the way to that — ditto for the state data center. (more…)

Tags: Budget, Governor, Reform

I’m headed up to the capitol now for two press conferences. The first, with Attorney General Rob McKenna, will cover the U.S. Supreme Court decision this morning that petition signatures are a public record.

The second, at 10:30, is with Gov. Chris Gregoire. Gregoire is going to announce a new budgeting process. This press conference will be shown later today on TVW.

Check back here in a few minutes for all you need to know.

Tags: Budget, Gregoire, McKenna, supreme court

Gov. Chris Gregoire’s office just sent out a brief note saying that at 10:30 a.m. tomorrow, she’ll unveil and discuss “a new comprehensive approach to constructing the 2011-13 state budget” — a process that will “be highlighted by more transparency, community involvement and outside experts.”

That’s all we know right now. Read the blog at 10:30 tomorrow morning for more information!

Tags: Budget, Governor, state

Find out the latest on high-speed rail — Is it worth the $590 million price tag? — the latest on whether Gov. Gregoire will soon be Solicitor General Gregoire and the latest from Arun Raha on the state’s revenue on this week’s edition of The Impact:

Tags: Budget, Gregoire, High speed rail, revenue, The Impact

Watch this week’s edition of The Impact right here. Host Jessica Gao goes over the budget, which Gov. Chris Gregoire just signed, and what it will mean for higher education.

Tags: Budget, Higher Education, taxes, The Impact