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

Gov. Chris Gregoire said she’s taken herself out of the running for the solicitor general job — the job Elena Kagan left to join the Supreme Court.

Gregoire said she was humbled to be mentioned, but that she couldn’t leave the state at this point. Read more here.

Tags: Gregoire, solicitor general

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

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

Gov. Chris Gregoire’s office just sent out notice that she’ll be in Washington, D.C. tomorrow with a group of other governors to ask Congress to pass an extension of the Federal Medicaid Assistance Percentages funding — otherwise known as FMAP.

The state budget assumed that Congress would chip in about $480 million to extend the program from Jan. 2011 through the end of the fiscal year. At the time, Gregoire and legislators said it was a reasonable assumption.

But Congress hasn’t passed it yet — and it may not. If the money doesn’t come through, the Office of Financial Management warns the following: “…the state could face thousands of lay-offs and significant cuts to social service programs,” according to the press release, which continues: “To cover the loss of $480 million in cuts alone would require a 7.4 percent across-the-board cut to eligible programs – with losses equaling $274 million for the Department of Social and Health Services, $52 million for the Department of Corrections and $83 million for higher education.”

Gregoire is holding a conference call tomorrow morning. Check back here for more information.

Thirty states, with both Democratic and Republican leadership, have included additional FMAP funding in their budgets.

Tags: FMAP, Gregoire

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 sent a letter to Washington’s Congressional Delegation today, asking them to try to pass the federal Medicaid matching money that the state wrote into its budget.

In short: The state was banking on $480 million from the federal government to help pay for Medicaid. That $480 million figure was used to balance the budget this session. Without it, the state would face a deficit, and Gregoire said she’d have to call another special session to rebalance the budget.

Here is the letter:

Gregoire says if the state acted quickly, they’d have to cut 6,000 jobs in a special session. If they waited until next session, that number would double.

Tags: FMAP, Gregoire

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

With President Obama’s nomination of Solicitor General Elena Kagan to the U.S. Supreme Court, Washington’s governor is rumored to be on the short-list to replace her, according to this article from a Washington, D.C. publication.

So what happens if Governor Gregoire moves to the other Washington? It depends on when she would resign:

• Before May 31: primary and general election to replace her
• After May 31 but before October 3: general election only – winner takes all
• After October 3: Lt. Governor Brad Owen succeeds her until the 2012 election, but his post would be on the 2011 ballot

The governor’s predecessor, Gary Locke, has already staked a post in the Obama Administration.  He serves as the Commerce Secretary.

Tags: Governor, Gregoire, solicitor general