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Budgeters put tough decisions on hold

Tue., Dec. 13, 2011

‘Early Action’ relies on transfers, savings

OLYMPIA – For two weeks, legislators have heard emotional, sometimes angry testimony against major cuts to state programs and in favor of raising taxes. Monday, it became apparent they will do neither.

At least not this month, in the special session called to address the shortfall.

Legislative budget negotiators announced an “Early Action” budget in both houses that would fill about $480 million of the projected gap in the state’s General Fund budget.

It involves an array of administrative cuts, fund transfers and savings achieved in different state agencies. But it has none of the controversial program eliminations Gov. Chris Gregoire proposed last month.

“These are the least painful cuts. There will be more pain later,” House Ways and Means Committee Chairman Ross Hunter, D-Medina, said after one of the shortest budget hearings in recent memory.

It was in sharp contrast to a hearing just two weeks ago, when protesters had to be carried from the room by state troopers. On Monday, witnesses used phrases like “relative lack of trauma” and “creative approach,” but acknowledged it was only a partial fix.

The legislative budget proposals – which are currently identical but could be changed with amendments in the respective budget committees or during floor debates – put off until early next year the difficult decisions Gregoire said are needed to solve the state’s budget problems.

The state can’t run a deficit, and it currently has a projected shortfall of $1.4 billion between money going out of the General Fund for scheduled programs and salaries, and the amount of revenues expected to come in. A month ago, Gregoire proposed cuts and various fund transfers totaling about $2 billion, to close the gap and provide for a cushion if tax collections continue to fall.

The legislative plans amount to less than a fourth of that amount.

State Sen. Mark Schoesler, R-Ritzville and a member of the Senate Ways and Means Committee, called it a “timid but necessary” budget. “Baby steps,” said state Sen. Mike Padden, R-Spokane Valley.

Some reductions are achieved through accounting maneuvers. For example, like Gregoire, legislators would have the state delay a payment to schools to help cover bus depreciation for nine months, which saves about $49 million over the two-year budget cycle. They would make some changes in the way schools report enrollment, which saves money in some places but costs a little more in others.

But there are no proposals to change the levy equalization program or the number of school days, which Gregoire has in her proposal.

“We don’t have consensus on cutting four days out of the school year,” Hunter said.

Gregoire also proposed asking voters to raise the sales tax by a half-cent for three years to “buy back” the deepest cuts to schools, health care and public safety programs.

But any discussion on tax increases, like discussions on deeper cuts, will wait until next year. The closest the Legislature might come on a tax issue is to ask Congress to pass a law that evens out sales tax rules across the country, so states receive taxes from retail purchases their residents make from online retailers in other states.



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