November 23, 2008 in City

State workers may face budget ax

Growing deficit is limiting options
Richard Roesler Staff writer
 

Also today

Spokane mayor plans spending increase/A9

OLYMPIA – The specter of layoffs is looming over a sector of the economy that rarely sees it: state workers.

As Olympia struggles to bridge a record budget shortfall of $5.1 billion over the next 2 1/2 years, lawmakers and budget officials say that cutting jobs looks more likely.

“It’s difficult to imagine that we’d be able to balance the budget without there being some reduction in the size of the work force,” said Glenn Kuper, spokesman for the state budget office. Retirements and attrition, he said, aren’t likely to be enough.

“I would say it’s very likely,” state Sen. Margarita Prentice, when asked about layoffs. The Renton Democrat leads the Senate’s budget-writing committee.

There are about 16,000 state-paid workers in the Spokane region, including social workers, probation officers, prison guards, mental health workers and the staff and faculty at two public universities.

Teachers also are largely state paid, but are more insulated from budget woes because the state constitution mandates that funding schools is the state’s “paramount duty.”

The news worsened last week, when a state economist announced that a weak economy has caused the expected $3.2 billion shortfall to mushroom into a $5.1 billion mess. That’s nearly twice the size of Idaho’s entire general-fund budget.

“It’s worse than anyone has imagined,” said Prentice.

And the shortfall could grow even larger due to growing numbers of students in public schools, apparently as parents pull their children out of private schools.

In Pullman on Saturday, Gov. Chris Gregoire told the Associated Press it could get as bad as $6 billion.

All of which has some state workers worried.

“People that haven’t been here very long are definitely concerned for their jobs,” said Greg Streva, a plumbing foreman at Washington State University. “People are scared.”

The largest state workers union, the Washington Federation of State Employees, argues against job cuts. It represents about 40,000 of the state’s more than 100,000 employees.

“We believe, as some economists believe, that the worst thing to do during an economic downturn is to lay off, especially public employees,” said Tim Welch, the union’s spokesman. Demand for state services rises in tough times, he said. And in an economy reliant on consumer spending, he said, keeping people on the job is a good idea.

“The problem with state government is everyone doesn’t look at it as comparable to Microsoft or Boeing,” Welch said. “They look at it as something that needs to be cut. But a worker is a worker is a worker.”

A similar argument is being made by Gregoire, who’s one of many governors calling for an influx of federal dollars to pay for construction projects and create jobs.

“We don’t want people to lose hope,” Welch said. “Government can step up and give hope by creating jobs, and that will help us recover.”

Others question whether cash-strapped taxpayers can continue to foot the bill.

Yes, many state workers provide important services, said Jason Mercier, with the conservative Washington Policy Center.

“But the taxpayers are not sending money to Olympia to provide employment,” he said. “They’re sending it to provide a service. And if that service is no longer necessary or funded, then that position should not be continued.”

Union-negotiated cost-of-living increases for state workers, Mercier said, will cost $352 million more over the next two years. Similar increases for non-employees who are still paid by the state, such as home health care workers, add $169 million more.

Most would get a 2 percent cost-of-living increase in each of the next two years. But even before last week’s news that the budget shortfall is far worse than expected, Gregoire was floating the idea that unions may be forced to choose between keeping those increases or keeping jobs.

Welch argues it’s a false choice.

“We think these were modest pay raises that could be sustained in a down economic year,” he said. “Two (percent) and two is not giving away the farm.”

A far better idea, he said, would be to scrutinize the state’s dozens of tax breaks, some dating back to the Great Depression. Some are clearly good ideas, he said, like the tax exemption on food. Other tax breaks, however, may be costing the state too much to continue.

“Folks have had a moratorium on paying that tax,” he said. “And we think that in tough times, folks who’ve had those breaks should maybe pay their fair share.”

Some lawmakers, notably Senate Majority Leader Lisa Brown, D-Spokane, make a similar argument.

“I think we will absolutely be looking at current tax breaks,” she said.

For workers, the picture will get a little clearer in mid-December, when the governor will propose a budget for the next two years. Lawmakers have until next spring to come up with a final version.

Greg Davis, a longtime nurse at Eastern State Hospital, said staff are already stretched thin.

For years, he said, state workers accepted pay that was significantly lower than the private sector because the jobs were stable, with good benefits.

Particularly in hard-to-fill jobs, Gregoire has improved pay. Salary and benefits increases over the past two years totaled nearly $1.6 billion.

Health coverage, which for years was free, is now partly paid by workers. Still, they pay far less than most private-sector workers: The most popular plan costs $82 a month to cover a family.

Some workers and union leaders say there are better ways for the state to cut costs.

Streva, the WSU plumbing foreman, recommends less new construction on campus. Instead, he said, the school should focus on maintaining the buildings it already has.

He also said a lot of workers were unhappy to learn recently that a new $125,000 raise would make WSU President Elson Floyd the sixth-highest-paid public university president in the country.

“This guy’s the sixth-highest-paid president in the country and we’ve got people concerned about losing their jobs,” said Streva. “It’s hard to wrap our minds around what they’re thinking.”

Floyd on Friday volunteered for a $100,000 pay cut, citing the tough economic times. His $725,000-a-year salary will drop to $625,000 in January.

In Spokane, child support enforcement officer Kandy Kraig said she’s hopeful layoffs can be averted.

“We are optimistic that there will not be any cuts, that the savings will come from things that we can do as employees to help,” she said.

One big savings, she said, is the fact that Gregoire has now frozen most hiring.

“At this point, we have a lot of people taking retirement,” Kraig said. “They’re not hiring for those positions.”

Of course, that means the remaining workers have to absorb more work, she pointed out.

She also argues that state workers provide many critical services, yet remain largely invisible to the public.

“Maybe there’s some way we can open their eyes to that,” she said.

So far, Kraig said, nobody’s suggesting giving up the cost-of-living increases or taking unpaid days off, as some Idaho workers are being told to do.

“We’re just hopeful that everything’s going to work out OK,” she said.

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


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