Editorial: Obstacles remain despite forecast

The state came out about $22 million ahead in the revenue forecast released Wednesday.

That’s $22 million toward a projected 2013-2015 total of $32.65 billion; a tiny improvement, but at least an improvement. The quarterly estimates had swooned repeatedly until June, when the first glimmers of a turnaround appeared. In the meantime, the Legislature and Gov. Chris Gregoire have slashed or junked programs, and sucked the loose change out of every non-general fund in order to balance the state budget without undertaking some fundamental reforms that might stabilize the numbers.

The new forecast also included a $29 million boost for the remainder of the 2011-2013 biennium, money that would be best used to shore up Washington’s limited reserves.

State workers have taken their licks as the cuts were made. For one, there are 7,500 fewer of them since the recession hit, taking the total down to fewer than 61,000 – the least going back to the late 1990s. They took a pay cut, increased their contributions to the state’s medical and pension plans, and accepted furloughs during the 2009-2011 biennium.

Saturday, an agreement with the Washington Federation of State Employees was announced that will reverse the pay cuts, allow for a potential 1 percent pay increase in Fiscal 2015 if revenue forecasts improve still more, and add a 13th pay step. The federation represents about half of the state’s 61,000 workers.

Negotiations continue toward a separate agreement that will address medical benefits for all employees. If no deal is struck by Oct. 1, the existing pay will remain in place for another year.

But the changes are premature given the continued uncertainties regarding economic recovery. The incremental improvement in the budget outlook underscores the continuing fragility of the fiscal environment.

Along with other previous commitments to increase teacher and community college pay, and higher pension-related costs, the state will be looking at an additional $1 billion in costs for the next biennium. Satisfying the Washington Supreme Court that the state is fully funding K-12 education will also create more spending.

Gubernatorial candidates Rob McKenna and Jay Inslee have given assurances they can make the numbers work when the economy turns around. It will have to spin like a top if Olympia is going to cover its commitments.

But anything less from Gregoire might have made things worse. In fact, the new contract fulfills commitments made when the federation agreed to the givebacks. Everybody was too optimistic about a rebound in revenues. From the employees’ point of view, though, anything less in the proposed settlement would have constituted bad faith.

And the other parishioners – the taxpayers, more than 300,000 of whom are out of work, but looking? If asked, they might say a little more patience was in order.