Gregoire predicts a slow rebound

Fri., Sept. 18, 2009

By John Stucke johnst@spokesman.com (509) 459-5419

Hopeful on health reform

Gov. Chris Gregoire has no plans to dust off proposals to usher in universal health care for Washington state residents.

Gregoire is confident Congress will enact a health reform package this fall to insure all Americans despite deep reservations among voters and divisions among lawmakers.

“I have not given up hope,” she said Thursday.

Health care reforms must begin at the federal level, she said. States might be able to offer complementary programs that would enhance a baseline federal policy, she said, but there’s no way Washington or other states can afford universal coverage without breaking the budget.

Her answers came amidst another bleak budget forecast. Weak consumer spending is contributing to a drop in state tax collections. The cost equates to another $238 million drain of state funds.

Insurance Commissioner Mike Kreidler reported this summer some 876,000 state residents – or 1 in 5 people living in Washington between 19 and 64 years old – do not have health insurance.

He had offered a plan guaranteeing all residents catastrophic coverage and access to immunizations, cancer screenings, and annual checkups. Funding would be provided by a 1 percent tax on employee wages and a 3 percent to 5 percent tax on employers’ gross wages.

Gov. Chris Gregoire got her seasonal flu shot Thursday. Yet there’s no such protection against the recession that continues to afflict the state budget.

State economists predict shoppers will remain tightfisted with their dollars and credit cards. The result will be fewer tax receipts and the loss of another $238 million from the state’s treasury.

“We know we’re not out of the woods yet,” Gregoire said, acknowledging that another set of budget cuts loom, even as Federal Reserve Chairman Ben Bernanke declared this week that the worst recession since the 1930s was “likely over.”

A report from the Economic and Revenue Forecast Council echoed the news with this caveat: “That only means that economic activity has stopped declining. It does not mean that good times are back.”

The governor said she believed the economic problems have “bottomed out” but that the state’s revenues won’t immediately rebound.

As the cameras clicked and she plugged flu vaccinations and urged residents to wash their hands and cover their mouths when coughing, Gregoire said the aggressive spread of the swine flu, or H1N1 influenza virus, should be viewed not only as a health problem, but as a threat to businesses as the critical Christmas shopping season nears.

While weak sales tax collections are to blame for about half of the predicted tax shortfalls, economists also cited possible business tax refunds along with notable reductions in actual collections.

Gregoire and Democratic legislators said spending cuts will be considered. She did not mention the possibility of tax increases.

Republicans said the Legislature should cut spending as lawmakers begin working on the budget.

Gregoire predicts a slow rebound

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