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Gregoire wants new budget process

Thu., June 24, 2010, 12:47 p.m.

$3 billion shortfall to force change

OLYMPIA — Facing a shortfall of $3 billion in the next biennium, the state has to come up with a new way of writing budgets, Gov. Chris Gregoire said today.

She announced a plan to develop a new system that includes public hearings, a 32-member panel of advisers, and the prospect of privatizing major state services like the ferry system.

Gregoire insisted that no state agency will get a free pass in the new system, that will build on the old system known as “priorities of government” by asking eight questions, starting with “Is the activity an essential service?”

If it is, the next question would be whether the state has to perform the service, or can it be provided by someone else.

Various state officials have asked such questions for years, but with varying results. In the last legislative session, for example, Republicans and some Democrats questioned whether the state should stop operating liquor stores, arguing it wasn’t essential and could be handled by private businesses. Several bills that tried to get the state out of the liquor business, but none passed. As a result, two initiatives were filed and at least one seems headed for the ballot after turning in petitions with 390,000 signatures on Wednesday.

Gregoire said she still opposes those initiatives, but the state needs to be open to other ideas on privatizing services. Among the services to study, she said, is the state’s ferry system. British Columbia recently privatized some of its ferry lines, she said, with mixed results.

The state should also consider whether a private firm should run its data center, she said.

“We need to challenge all standing assumptions,” she said.

The Office of Financial Management will hold four public hearings around the state for public comments on the budget. A panel of advisers that includes representatives from business, labor, the Legislature, local governments, professional groups, think tanks and communities will be part of the Governor’s Committee on Transforming Washington’s Budget.

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