Spin Control

WA Lege Day 61: How bad will forecast be? We'll know Thursday

OLYMPIA -- Washington officials are bracing for more bad budget news next week, and the only real question seems to be "How bad?"
Already expecting a $4.6 billion gap between the cost of existing programs and the expected revenue for the coming two-year budget cycle, legislative leaders have said that figure could grow by at least $500 million -- and maybe as much as $2 billion -- when the state economic forecast is released on Thursday.
Gov. Chris Gregoire used the $2 billion figure Thursday in an interview with The Spokesman-Review editorial board, and Republican legislative leaders put it at the top of the range they were hearing discussed during a press conference Wednesday.
State officials are already looking at an array of budget reductions, such as eliminating or significantly scaling back some programs like the Basic Health Plan and the Disability Lifeline, cutting funding to colleges while allowing them more power to raise tuition, cutting pay to state workers and charging them more for benefits. But even with all the proposed cuts, closing a $4.6 billion gap was already difficult so the degree of difficulty increases with the projected deficit.
"I don't know that we have a Plan B yet," Senate Majority Leader Lisa Brown said today.
Brown said she considered two ideas being floated by some House Democrats unlikely: One would be creating a "25th month" by using July's revenues to pay for expenses in June, the end of the current biennium; the other is "revenue securitization" which basically raises money now by a bond sale based on the promise of future revenue.
The Senate is "not looking at" the 25th month at this point, she said, and securitization "is not where we're headed....we're looking at the cut side"
But there are only a few things that can definitely be ruled out: "We will not do a sales tax on food. No income tax, either."
A sales tax on food, levied in the early '80s when the state faced an economic downturn, was quickly repealed by voters. Income taxes have been tried several times, including last year when an initiative to impose the tax only on "high earners" was soundly defeated at the polls."

Gregoire, too, has ruled out tax increases, saying the voters spoke clearly last year that they expect government to reduce spending, not raise taxes. The lower revenue projections may convince legislators to eliminate programs as she's proposed, rather than trying to pare them back as they did in a supplemental budget that tries to keep the state out of the red through June 30. Legislators are "going to see my ideas aren't so hare-brained in the next week," she told the editorial board Thursday.


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