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Spin Control

Posts tagged: state budget

Sunday Spin: Getting a closer look at IT spending

OLYMPIA – Tucked inside the 291-page budget Gov. Jay Inslee signed last week is a paragraph that tells state agencies to ask for money for new-fangled tech gear a better way.

It’s what’s known as a proviso, sort of a marching order from the Legislature, somewhat akin to an earmark from Congress. . . 

To read the rest of this item, or to comment, continue inside the blog.

Sunday Spin: Let’s skip the folksy budget analogies

OLYMPIA – It is a rare day in the session that some legislator doesn’t offer the folksy wisdom that the state would be fine if it would just balance the budget like the folks back home.

Sometimes, those folks are mom and pop entrepreneurs on Main Street, struggling to make payroll as sales drop and the costs rise. They tighten their belts, take a smaller profit, layoff a worker or two, have a few more go to part-time, maybe buy a smaller ad in the local high school yearbook.

More often, though, the folks are a family around the kitchen table, deciding how to stretch the paycheck for food, clothes, braces or the kids’ college fund after paying the mortgage and the utility bill. They make those hard choices on what to do without, a legislator will say in a floor speech. Maybe get another year out of the pickup, carpool to work, put off that trip to Disneyland until next summer.

Such homey examples are designed to communicate the state’s budget situation to the folks back home. But they may actually do the folks back home a disservice by oversimplifying what the state budget is.

 To read the rest of this item, or to comment, continue inside the blog.

Revenue prospects flat; political prospects high

OLYMPIA — Washington's revenue forecast was up just slightly for the rest of this biennium, and through the next two-year budget cycle, a state panel was told this afternoon.

On the upside, construction is improving and employment should slowly rise, although it won't get back to pre-recession levels until sometime in 2014. On the downside, manufacturing is off a bit and so are exports except for airplanes, state economist Steven Lerch told the Economic and Revenue Forecast Council.

Bottom line, the state can expect to collect $30.469 billion for 2011-13, which is up about $29 million from last June's forecast; it can expect to collect $32.649 billion for 2013-15, up about $22 million from that previous forecast. It can expect $35.5 billion in 2015-17, the first time forecasters have looked out that far.

The biggest risks — economic slow down in China, problems in the Eurozone and the federal government's willingness to consider across-the-board cuts — are all outside the state, Treasurer Jim McIntire said.

In recent years, some forecasts have been so bad that they prompted calls for special sessions of the Legislature and calls for deep cuts or new taxes. This time, legislators on the council were willing to wait until January, and the regularly scheduled session that will follow the election.

There's still a shortfall of about $1 billion the next Legislature will need to close, Lerch said. Or about $500 million if it uses up the reserve funds.

It's clear the economy isn't going to grow fast enough to provide revenue needed for things like education improvements being ordered by the state Supreme Court, Sen. Ed Murray, D-Seattle and the chairman of the Senate Ways and Means Committee said.

But the Legislature can look at the next forecast, due out in November, and look for some adjustments through the end of June that would add to the reserves, Rep. Ed Orcutt, R-Kalama, the chairman of the council said.

Sen. Dino Rossi, R-Sammamish, who was recently appointed to the Legislature and the council to fill vacancies, said the biggest problem with the economy is that Washington needs to become “a business-friendly state” to attract businesses and jobs.

“Many of the problems in the budget are self-inflicted,” said Rossi, who chaired the Ways and Means Committee during his previous tenure. Medicaid will be a big drain in a few years because Democrats “have swallowed Obamacare hook, line and sinker.”

Murray defended the current budget, which he helped author. All budget writers face the same problems and wrestle with the same tough choices, he added: “It's unfortunate this forum is degenerating into a campaign forum.”

“Facts are stubborn things,” replied Rossi.

“So is history,” countered Murray.

New state budget pushed into the fray

OLYMPIA — In an effort to break a budget logjam, Senate Republicans and their three Democratic allies unveiled a new  spending plan Thursday morning that would spend more on public schools and state colleges.

It also offers more money for child care for working families and has no new taxes. But it does skip a $140 million payment to state pension systems in exchange for other changes to pension plans that would save money in the long run. 

Sen. Joe Zarelli of Ridgefield, the top Republican on the Senate Ways and Means Committee, called it a “compromise approach” to the differences between the budget passed in a parliamentary takeover two weeks ago in the Senate and a significantly different plan passed by House Democrats on the last day of the regular session.

Sen. Jim Kastama, D-Puyallup, said it was a better plan than the one he joined with Republicans to pass. “It's a budget that can bring the special session to a close.”

Senate Democratic leaders, who only saw the proposal at the same time Republicans released it at a morning news conference, said it has “some very good movement,” because it restores money for public schools and higher education that Republicans proposed cutting two weeks ago.

Senate Majority Leader Lisa Brown, D-Spokane, said she was still concerned that the proposal cuts money for the Disability Lifeline, but “I feel great about the moves that were made on the spending side.”

The public release of a new budget proposal, signaled movement over talks which have essentially been at a stalemate for two weeks. But potential roadblocks quickly surfaced.

Democrats said they still have concerns about skipping the $140 million pension payment, because the cost of that grows over time. Republicans acknowledge the long-term cost of that is about $400 million over 25 years, but they estimate the savings from ending early retirements for new state employees would be $2 billion over that period, and that money could be used to shore up the pension funds.

The Legislature has skipped or delayed pension payments in six times since 2001, in budgets written by Democrats and Republicans, Senate Minority Leader Mike Hewitt, R-Walla Walla, said.

Gov. Chris Gregoire had asked legislative leaders to come  up with a budget that doesn't skip the pension payment, which Republicans favor but Democrats oppose, and also doesn't delay a $330 million payment to schools by shifting it from the end of this biennium to the first day of the next. Democrats favor that approach but Republicans call it unsustainable budgeting.

The new budget proposal doesn't do that. It also calls for the state to spend $780,000 to set up 10 charter schools, while cutting $1.5 million Democrats proposed for “collaborative schools”.  Charter schools, which can be set up by a public school and parents to try new methods and avoid some state requirements, would need new legislation to be passed along with the budget. Collaborative schools, a plan to pair the Education Departments of the state's colleges with troubled schools, has already passed.

Sen. Rodney Tom, another of the three Democrats who voted with Republicans on their Senate budget, is a strong supporter of charter schools. The budget would pay for 10 next year, in “persistently failing schools.” But Gregoire and other Democrats regard charter schools as taking money from the existing schools; the governor proposed the collaborative school program as a way to bring innovation into classrooms without setting up charter schools.

Gregoire: Everybody has to give on budget

Gov. Chris Gregoire: “Not interested in a special session.”

OLYMPIA — Gov. Chris Gregoire said she still has hopes the Legislature can reach a budget deal by midnight Thursday, the end of the current session, but conceded there is no deal at this point.

“I will fight to the end to get out of here on time,” Gregoire told reporters Tuesday morning. “I'm not interested in a special session.”

But if there's no compromise by the end of the day, that will be difficult, she said. And while there are things that she'll push for, she doesn't know what a workable compromise is yet: “I'll know it when I see it.”

After House Democrats passed a budget solely with their members support, Senate Republicans got the support of three conservative Democrats in that chamber to use a parliamentary procedure Friday and pass a very different spending plan with more program cuts, no new taxes and fewer accounting shifts. The move caught Senate Democratic leadership by surprise.

Gregoire declined to speculate on how the majority  leadership miscounted the support for their budget, and said she, too, was surprised by some of the things that became a point of contention between the two caucuses. But Friday' night is “Over. Done. Through.” and all sides have to work out the compromise.

She's also not interersted in a solution that has been suggested by some legislators: forget about a revised budget and give her extra flexibility to cut programs or agencies. Under current law, a governor can only make across the board cuts for all agencies to avoid a deficit.

Gregoire has asked for expanded authority to handle budget problems for several years, but that's not the solution for this budget problem, she said. “They have to pass a budget.”

Legislative pay cut: Some say yes, some say no

OLYMPIA – About half of the 15 members of the Spokane-area legislative delegation have volunteered for the same level of pay cuts the imposed on state workers. That’s a level slightly better than legislators statewide.

Many who have done it, like Rep. Kevin Parker, R-Spokane, say it’s a personal decision.

“As a businessman, the buck starts and stops with me,” said Parker, who owns a chain of coffee shops. “It’s the same with us as legislators.”

Parker’s seatmate in Spokane’s 6th District, Republican John Ahern, said he doesn’t plan to ask for a pay cut, but he is donating 3 percent or more to charities, ranging from his church and the Boy Scouts to organizations that oppose abortion like Teen-Aid.

“This way I know exactly where the money is going,” Ahern said. If he took a pay cut, the money would stay in the state’s general fund, and go to state programs or agencies he doesn’t support….

To read the rest of this item, or for a list of the Spokane-area delegation's decisions on a voluntary pay cut, click here to go inside the blog
  

State economist: Risk of recession increasing

OLYMPIA — Washington's economic outlook for the current budget cycle has gone from cautiously optimistic to “a sinking feeling of pessimism,” the state's chief economist said Thursday.

“The risk of the economy slipping back into recession has increased significantly,” Arun Raha said in the latest economic and revenue update.

In June, Raha was confident that Washington and the rest of the United States would avoid a “double dip recession” and that growth would continue, although slowly.

Since then, debt problems have spread beyond in Europe, the U.S. government barely avoided a default on U.S. bonds but couldn't escape a downgrading by a major rating agency, and consumer confidence “is in the tank.”

State job growth hasn't been as strong as projected, the single-family housing construction sector remains flat, banks and local governments have been laying off workers and about the only manufacturing sector growing is aerospace.

Oh, and by the way, state revenue collections are down about $9 million below forecast since June.

The next full revenue forecast is due in mid September. A significant drop in projected revenues could lead to a call by some legislators for a special session to make deeper cuts, sooner.
State agencies already were ordered to identify ways they could cut their budget by as much as 10 percent.

Gregoire: Time of essence on budget fix

Gov. Chris Gregoire says the budget gap is large, but the options for closing it are small, during a press conference Monday.

OLYMPIA — Warning that every month is critical in solving the state’s looming budget deficit, Gov. Chris Gregoire tried to prod legislators into suggesting their budget cuts for the rest of the fiscal year.

Gregoire said that three of the legislative leadership groups she’d ask for budget-cutting suggestions by today have asked for more time. She has no time table yet for deciding when or whether to call a special session to address a projected $385 million gap between state revenue and state expenses.

Last week, she proposed a series of cuts to state programs that are on the books, including the Basic Health Plan and Disability Lifeline. But many can’t be changed without at least 30 days of notice to recipients; it’s required by law, and it’s fair, she said.

“We’re taking away people’s livelihood,” she said. “We’re taking away people’s health care.”

Every dollar put off now means more money that has to be cut near the end of the budget cycle, Gregoire said. “For every inaction, there is going to have to be a counter action.”

State wants to reopen union contracts

OLYMPIA — Thursday’s worse than expected revenue forecast prompted Gov. Chris Gregoire to order state employee unions back to the bargaining table to renegotiate contracts.

With a proclamation, Gregoire invoked a state law that allows her to ask the unions to reopen existing contracts. A separate declaration by Office of Financial Management Director Marty Brown about the forecast for the 2011-13 biennium says the contracts reached for those years are also unfeasible and must be reopened.

Most of the major contracts for 2011-13 are still under negotiations, a spokeswoman for Gregoire said.

Gregoire had resisted declaring an emergency and trying to renegotiate the current contracts during the past session.

Gregoire to make special session decision next week

OLYMPIA — Gov. Chris Gregoire could decide by next week whether to call a special session to cut the state budget or apply across-the-board cuts of as much as 4 percent to many areas of the state’s general fund budget.

She’ll talk with the Democratic and Republican leaders of both legislative houses on Thursday, seeking a commitment that they would get in and out of a special session in two to three days and “make the decision before Congress goes on recess.”

“I want to know tomorrow where they are,” Gregoire said of Senate Majority Leader Lisa Brown and Minority Leader Mike Hewitt, House Speaker Frank Chopp and Minority Leader Richard DeBolt. “I’ve had legislators saying don’t call uis back…They don’t think they can get it done.”

But Sen. Joe Zarelli of Ridgefield, the Senate Republican’s point man on budget matters, said Tuesday a special session would be much better than across the board cuts because it would allow the state to reduce the budget in a thoughtful way, get some long-term savings and create a reserve. The only reasons not to  have a special session, Zarelli said, are “political expediency” and “legislative incompetency.”

State law allows a special session to last 30 days, but Gregoire said she wants them to come to Olympia with a plan they can pass in two or three days, then adjourn. To do that, Democrats, who  hold large majorities in both houses, will need a consensus before they arrive, she said,

At the end of this year’s regular session, the supplemental budget was not finished and Gregoire called a special session, asking legislators to wrap it up in no more than seven days. They finished after midnight on the 30th day.

State law does not allow the governor to vary the cuts for different agencies, or single out some programs for elimination while sparing others from all cuts. “I think it’s a ridiculous tool,” Gregoire said.

She will urge the Legislature to change the law, but not in the special session. She will offer to give legislators a blueprint of budget cuts, asking Democratic leaders, “If I give you a proposed budget, could you come in and get it done?”

The state is facing a budget shortfall, in part because Congress has yet to approve extra money for Medicaid patients the states had been told early this year to expect. The anticipated $480 million was to be used as the state’s ending fund surplus, but no legislation with that money has made it through both chambers of Congress, and prospects are fading as members of Congress take heat for a ballooning federal deficit.

The state’s revenue projections also have dropped since the Legislature passed its supplemental budget in April. Without a special session, Gregoire can cut to eliminate the projected shortfall of more than $345 million to pay for existing programs and salaries, but can’t make cuts to leave additional money for a ending fund surplus.

Gregoire press conference about more than just Rossi

The political news out of the governor’s Tuesday morning press conference was all about a possible Dino Rossi v. Patty Murray matchup. While that filled the lunchtime blog post, there were other interesting items as well, which will be reported in Wednesday’s S-R. The “non-political junkie’s story, starts below, and continues inside the blog…Jim Camden

OLYMPIA – With the state facing a possible shortfall of $2 billion in the next budget cycle, the governor’s office will hold “town hall” meetings around the state on the budget this summer and early fall.
Gov. Chris Gregoire said Tuesday she’ll send out the head of the Office of Financial Management to explain the tight budget and give residents “a full appreciation of the trade offs” for potential cuts.
“I think there’s a misimpression out there, that there’s lots of money in Olympia,” Gregoire said during a press conference. The meetings will give residents a chance to weigh in on “what are we willing to cut or get rid of.”…

WA Lege Day 30: Democrats defend the changes

OLYMPIA—Some of the problems with the original bill suspending the supermajority required for tax increases have been removed, Sen. Joe Zarelli, R-Ridgefield, said.

That doesn’t necessarily mean any Republicans will vote for it, he said.

Democrats defended the suspension.

“This is a significant issue. We do not take lightly, changing or even suspending the will of the people,” Sen. James Hargrove, D-Hoquiam, said. The first amendment to I-601 was suspended by Sen. Bob Morton, a Republican. Republican Sens. Jim West and Dino Rossi also suspended initiatives, some of them by bigger margins than I-960, Hargrove said.

“It’s disengeniuous to suggest that one side of the aisle always upholds the will of the people and the other side does not,” he said.

The drop in the budget is worse than the drop in the early 1980s, when the state extended the sales tax onto food purchases, he added, and “I don’t intend to do that.”

“In all our districts we see homes foreclosed and businesses closed. It wasn’t state government that got us there. It was waste, fraud and greed on the part of corporate America,” Sen. Ed Murray, D-Seattle said.

Republicans talk about the big majorities in their districts that voted in favor of I-960, but his district voted heavily against it, Murray said. The state has a republican form of government that sends legislators to do the work of the government.

I-960 hearing: Roach “look at the vote” in 2007

OLYMPIA — Sen. Pam Roach warns that repealing I-960 will result in a higher percentage of voters supporting a new initiative to reinstate the two-thirds majority needed to raise taxes.

I-960 failed in the city of Seattle, Roach said, but it passed with big margins in other parts of the state.

I-960 hearing: Benton “strongly opposed

OLYMPIA — “What does the phrase will of the people mean to you,” Sen. Don Benton asked the Ways and Means Committee.

Of course Initiative 960 makes raising taxes more difficult, Benton said. But that’s what the people wanted. It also makes government more transparent.

“Too many of our citizens find the legislative process a mystery,” Benton said. “Too often legislators hear more from lobbyists than their constituents.”

THe voters did support the initiative, he said. “Why does public knowledge frighten so many here?”

Don’t throw out the rules for giving more information on the cost of legislation to the public.

WA Lege Day 25: Blogging Sen. Ways & Means hearing on I-960

OLYMPIA — The Senate Ways and Means Committee hearing on proposed changes to Initiative 960, the law that requires a two-thirds majority to pass a tax increase, is just starting.

Spin Control will attempt to blog the highlights. Thus far, it has mainly been milling about, with committee staffer Diane Criswell giving the standard report of bill highlights on SB 6843.

In the audience is initiative maestro Tim Eyman, Evergreen Freedom Foundation head Bob Williams.

Sen. Don Benton and Sen Pam Roach have been called for testimony.

State budget outlook: Getting less awful, slowly?

OLYMPIA – Good news for the state is the recession is pretty much over. Bad news is won’t seem like the recession is over until the middle of the next year.

That was the assessment Thursday Arun Raha, the state’s chief economist, gave the Senate Ways and Means Committee.

            The panel, as well as all other House and Senate committees, are gathering in Olympia this week to hear what’s happening with the bills they passed this year, and get a preview of what they’ll face next.

What they’ll face is a budget that’s more than $1.2 billion out of balance, even after eating up about $570 million the legislators thought they’d left last spring as an “ending fund balance.” That’s billion with a “b”, or as Ways and Means Chairwoman Margarita Prentice, D-Seattle, put it: “Pretty soon you’re talking real money, right?”

Senate Majority Leader Lisa Brown, D-Spokane, in a separate interview, said she’s warned her caucus to expect another tough session with the budget – tougher than last year, because there probably won’t be several billion from the federal government in stimulus money. 

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About this blog

Jim Camden is a veteran political reporter for The Spokesman-Review.


Jonathan Brunt is an enterprise reporter for The Spokesman-Review.


Kip Hill is a general assignments reporter for The Spokesman-Review.

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