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The Spokesman-Review Newspaper
Spokane, Washington  Est. May 19, 1883

Savings package would cut $290 million

Plan limits spending, trims programs

Curt Woodward Associated Press Writer

OLYMPIA – Democratic legislative leaders are pushing through an agreement to quickly cut about $290 million in state spending, the first major budget savings that will come out of the 2009 Legislature.

The savings package is a combination of administrative spending reductions and state program cuts, modeled after Gov. Chris Gregoire’s plans for early penny-pinching in the face of a 2 1/2-year deficit of $6 billion or more.

The savings, presented in legislative debates Friday, are needed to help ensure that the present fiscal year ends in the black on June 30. Making the cuts now also jump-starts some savings that will be needed to balance the next two-year state budget, which runs from mid-2009 to mid-2011.

“This is just a first step as we go forward,” said Sen. Rodney Tom, D-Medina. “We have a lot more to do.”

The state spending cuts represent close to half of the $600 million deficit expected for the current fiscal year.

But lawmakers aren’t yet dealing with the other half of the governor’s supplemental budget proposal: the spending needed to keep government operating until July. That half of the equation will likely appear next month.

On top of the state spending cuts, the Legislature’s savings package also counts on new federal money – just as Gregoire’s budget did.

Some of that was attached to the federal stimulus package. If it arrives as expected, the federal aid could save the state’s present-year budget another $340 million.

Democrats also are transferring some money between state accounts to help shore up the budget’s bottom line, as did the governor.

Minority Republican lawmakers said the Democrats’ savings plan, sometimes called a “belt-tightening” package, isn’t nearly enough.

“I would have to say that we’re going to have to take our pants off, and go back and purchase a pair about three sizes smaller, if we’re going to really talk about what we need to do in this budget,” said Rep. Gary Alexander, R-Olympia.

The Legislature will save part of the estimated $290 million by broadening a freeze on hiring, travel, contracts and equipment purchases begun late last year by Gregoire. Lawmakers also trim costs by reducing spending on specific state programs, such as the Basic Health Plan and hospital reimbursement rates.

They have some differences with Gregoire’s early plans. For instance, they would continue subsidizing children’s health care for families making between 250 percent and 300 percent of the federal poverty level – about $63,600 yearly for a family of four.

The Legislature’s two savings plan bills face final approval in the next few days before heading to Gov. Chris Gregoire, who would sign them into law.