December 16, 2008 in City

Depth of proposed state budget cuts could be shocking

By The Spokesman-Review
 

OLYMPIA – After months of bad news for the state treasury, Gov. Chris Gregoire and her budget advisers will on Thursday unveil their proposals for dealing with a two-year budget shortfall that may well reach $6 billion.

The specifics are still being hashed out. But there is near-universal expectation that the budget cuts Gregoire is about to propose will be startlingly severe.

“I think the governor’s budget will shock everyone,” said Senate Majority Leader Lisa Brown, D-Spokane.

Even most House lawmakers “have not really wrapped their arms around the magnitude of what we’re about to face,” said House Majority Leader Lynn Kessler, D-Hoquiam.

“You can’t lose weight by clipping your fingernails

As the state’s revenues sank far below expectations in recent months, Gregoire has ordered hundreds of millions of dollars in immediate cuts at state agencies. But that effort’s dwarfed by the scale of the budget problem over the next two years.

How bad is it? If the state were, for example, to close Washington State University, Eastern Washington University, the Northwest Museum of Arts and Science, the governor’s office, the Department of Ecology, the state’s national guard, and the State Patrol, it still wouldn’t even be halfway toward solving the problem.

“You can’t lose weight by clipping your fingernails,” Gregoire’s legislative director, Marty Brown, warned last week at a Greater Spokane Inc.’s packed legislative forum in Spokane. “…There will be cuts to everything.”

During her re-election campaign, Gregoire repeatedly pledged not to raise taxes during a weak economy. Her budget proposal will not include tax increases, Marty Brown said.

The shortfall is about 14 percent of the state’s general-fund budget. Factor out hard-to-touch things like basic education, debt payments and Medicaid entitlements, and it’s more like a third of the budget.

And since the state budget tends to touch everyone, cuts would be felt widely. The state treasury pays for diesel in school buses, child care for struggling single parents, prisons and lots of roadwork. It pays for vaccines for kids, the state troopers that rush to wrecks, and it heavily subsidizes the cost of tuition at the state’s colleges.

State dollars prop up a local safety net of health clinics, health coverage for poor children, and workers to help care for the elderly and disabled in their own homes. Thousands of Spokane-area state and higher-education employees are paid largely with state money, as are most school teachers.

Democrats: Let’s not ‘play the blame game’

Republicans are quick to point out that the Democrat-dominated Legislature has ramped up spending faster than revenues in recent years.

“We knew this was coming,” state Rep. Bill Hinkle, R-Cle Elum, said, suggesting that Democrats should apologize. “Lord have mercy, at some point we have to own up to what we’ve done.”

The last budget, he said, started out with a $1.8 billion state surplus. Democrats, he said, simply spent too much when they should have been saving more.

“For years, we’ve governed by group interest,” said Hinkle. “People show up to Olympia, and everybody’s got something that they want.”

Democrats’ response: Nobody foresaw this kind of economic meltdown.

“No one can with a straight face tell you that they would have written a budget that would have prepared us for the situation we’re facing now,” Brown said. It’s a waste of time, she suggests, for the two sides to “play the blame game” over the financial woes of the state and nation.

And it’s not like Republican lawmakers have much of a moral high ground on the budget, Marty Brown suggested.

“Maybe I could count on one hand the number of legislators who didn’t ask for something in that budget.” Hinkle wasn’t among those few, he added.

Brown and other Democrats argue that the crisis gives lawmakers an opportunity to revisit ideas from both sides and to work together.

Senate Democrats, for example, adopted an idea that Republicans had been championing for years: setting up a state “rainy day fund” for tough budget years. Both sides teamed up with the governor to pressure reluctant House lawmakers to agree. Those hundreds of millions of surplus dollars are now a key lifeline for the budget.

“It was just a good-government idea,” said Brown.

Tax increases?

For decades, Republicans and Democrats in the Legislature have ended up bridging big budget gaps with a combination of cuts and tax increases.

Unlike Gregoire, Brown won’t rule out tax increases.

“We’ll look at the whole range of options,” she said.

“We don’t want a downward spiral that just keeps getting worse,” she said.

Still, it will be difficult, she said, since tax increases typically require a two-thirds vote of the Legislature. Even with strong majorities 31-18 in the Senate and 62-36 in the House, Democrats don’t have the votes to do that alone.

Taxpayers have shown that they’re sometimes willing to support additional taxes for things they like, such as approving higher gas taxes for roadwork or making it easier for schools to raise local property tax dollars. Brown said she’s hoping to establish a dialogue with voters about the things – good schools, health care, mental health – they might be willing to pay more taxes for. Balancing the budget solely by cuts, she said, would mean “massive job losses” that would hurt the economy more.

“I trust the public,” she said.

Richard Roesler can be reached at (360) 664-2598 or richr@spokesman.com.

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