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No time for ‘social issues’ in 2012 Legislature?

OLYMPIA — Republicans pushed back Thursday against Gov. Chris Gregoire's call for the legalization of same-sex marriage in the upcoming legislative session.

But Gregoire made clear she would stick to her guns on the issue.

One of the main candidates to replace Gregoire said the Legislature shouldn't make the decision on its own. Instead, state Attorney General Rob McKenna said, it should send any proposal it passes to the ballot and give voters the final say.

At panel discussion for the top Democratic and Republican leaders sponsored by the Associated Press Thursday, Senate Minority Leader Mike Hewitt of Walla Walla argued that a short, 60-day session with a major budget hole is not the place for “social reform” that could roil the legislators: We should leave social issues off the agenda,” Hewitt said.

He also questioned whether one of the proponents of same-sex marriage legislation, Sen. Ed Murray, D-Seattle, will have time to devote to that bill while serving as chairman of the Senate Ways and Means Committee. Murray, who is openly gay, is “vested in this personally”, Hewitt said. “I really don't want his attention taken away” from the budget.

House Minority Leader Richard DeBolt of Chehalis questioned how Democrats could devote time to hearings on same-sex marriage legislation when they won't set aside time for hearings on GOP reform proposals: “Apparently we have time to hear certain bills but not other bills.”

Democratic leaders said it's an issue the Legislature should take up this session. “This is the right time to move forward with marriage equality,” Senate Majority Leader Lisa Brown of Spokane said.

In a separate session, Gregoire agreed that fixing the budget is “priority one.” But there's time to debate her proposal on same-sex marriage, too, she insisted: “What will history say when we say 'Sorry, but we had a budget to pass so we continued to discriminate.' In tough times, we stand up to the challenge.”

And legislators can find time to do more than just the budget, she added. “I multi-task; they multi-task. It can be discussed thoughtfully and deliberately.”

In a later interview, McKenna said that while same-sex marriage may be an important issue for some legislators and Gregoire, he didn't know if a short session with a deep budget problem is the best time to address it.

“This is an issue for the voters to decide. I hope if they do pass it, they send it to the voters,” McKenna said. Such a requirement might mean the legislative maneuvering and debate over such a contentious issue will take less time, because voters would have the final say, he added.

Quick opposition to Gregoire call for same-sex marriage

OLYMPIA — Gov. Chris Gregoire's emotional call to have Washington state recognize same-sex marriages brought cheers from supporters who filled her conference room Wednesday. But opponents were already coalescing for a fight in the Legislature and a Republican leader questioned the timing of her push for the controversial issue.

Sen. Dan Swecker, R-Rochester, said a debate over that divisive issue could lead to a breakdown in cooperation between parties in the Senate over the budget.

Gregoire urged the Legislature to pass a bill that would allow gay and lesbian couples to marry in the state without requiring churches to perform the service if their religious denomination objects.

“It is now time for equality of our gay and lesbian citizens, and that means marriage,” Gregoire said. . .

Gregoire: Time to legalize same-sex marriage

OLYMPIA — Washington must end discrimination against same-sex couples, an emotional Gov. Chris Gregoire said this morning. She urged the Legislature to pass a bill that allows gay and lesbian couples to marry in the state without requiring churches to perform the service if they object.
  

Gregoire received extended applause from some 70 people crowded into the governor's conference room as she called same-sex marriage rights a defining civil rights issue of the current generation. Younger citizens are ahead of her generation, she said, and the public is ahead of the Legislature on it, she insisted.

Legislators who attended the press conference said they believed they have the votes to pass a bill Gregoire will endorse in the House, but are “a few votes” short of a majority in the Senate.

But it is time for legislators to step up and take a tough vote on same-sex marriage, Sen. Ed Murray, D-Seattle, said. He predicted he would get Republican votes for that measure, something he doubted he would get for a tax increase.

“Suddenly, gay marriage becomes easier than passing taxes,” Murray said.

Gregoire signs budget; tougher decisions ahead

Rep. Ross Hunter checks his hands for tan after Gov. Chris Gregoire says legislators need to show up “tan, rested and ready” in January to cut more than the budget she signed Tuesday.

OLYMPIA – With advice to the Legislature to show up “tan, rested and ready” in January to finish fixing the state’s budget problems, Gov. Chris Gregoire signed the $480 million “downpayment” supplemental budget.

It is, Rep. Ross Hunter, chairman of the House budget committee, said, merely the first supplemental budget of the two-year fiscal cycle.

“Count on it,” Gregoire replied, adding the votes needed to find another $1.5 billion in savings will present legislators with “the worst votes they’re ever going to take in their lives.”

The budget signed Tuesday had bipartisan support in both chambers, but involves a number of fund transfers and accounting maneuvers to accomplish some of the savings…

To read the rest of this post, click here to go inside the blog.

Worth a look: Initiatives that are paid for

Although the Legislature is on break, new legislation continues to pop up. Among ideas is a proposed constitutional amendment from Sen. Dan Swecker of Rochester and other Republicans like Mark Schoesler of Ritzville and Mike Hewitt of Walla Walla.

It requires any initiative that starts a new program or expands an existing one to identify a way to pay for it.

In the past, voters have approved initiatives to give public school teachers regular raises or shrink classroom sizes or, just last month, require more training for home care providers. But the initiatives didn’t come up with new sources of money to cover those changes. Legislators often suspend those directives in tough budget times.

Gov. Chris Gregoire said last week she hadn’t read the proposal, but might support it. The Legislature has to identify a money source when it comes up with a new program, she said. When voters pass legislation at the ballot box, maybe they should, too.
  

Gregoire: Reform liquor board and lottery

OLYMPIA – Washington should abolish the Liquor Control Board and see if a private company can do a better job of managing the state Lottery, Gov. Chris Gregoire said Thursday.

It should also spread some of the efficiency standards and cost-cutting measures successful in business, known as Lean, across more state agencies, she said in proposing a series of government reforms for the Legislature to consider when it returns next month.

Many Republicans and some Democrats said they wanted to reform government, to raise productivity and cut costs, before considering most of the cuts to programs and staffing Gregoire proposed last month or any tax increases like her proposal for a temporary half-cent increase in the sales tax.

The governor said Washington will likely have to do all three – institute reforms, cut key programs and raise taxes.

“I’d like them to come forward with reform ideas that would close a $2 billion hole,” she said.

To read the rest of this post, go inside the blog.

Gregoire wants tougher teacher, principal evalulations

OLYMPIA — Bad teachers and principals could be fired at the end of a school year if they don't improve under a series of education reforms proposed today by Gov. Chris Gregoire.

State universities would also set up “laboratory” schools in failing schools across the state and a cabinet-level office would be set up to coordinate and improve high school, college and technical school programs, under plans to be presented to the Legislature in January.

The office would oversee everything from high school through graduate level programs. Gregoire said she's dropped an earlier plan for a single office to coordinate everything from pre-school through Ph. D programs in the state.

The state's evaulation system would be changed from the current two levels of unsatisfactory and satisfactory to a four-level system: unsatisfactory, basic, proficient and distinquished.

A teacher or principal that was evaluated as unsatisfactory in September would be fired in the spring if he or she did not receive a new evaluation of at least basic. Teachers and principals evaluated as basic two years in a row would also be fired if they didn't move up to proficient.

Gregoire said the state needs an evaluation system that is fair, clear and effective, and helps every teacher grow. The current two-step system doesn't work, she insisted.

 

Spec Sess Day12: Brown says they’ll find a partial solution

OLYMPIA — Legislators will try to fill some of the looming budget gap next week, but won't come close to the $2 billion in cuts Gov. Chris Gregoire proposed last month.

Senate Majority Leader Lisa Brown said she expects a budget proposal to be introduced Monday that will address a “substantial piece” of the projected shortfall. She declined to list a specific number, but hinted the amount could be between $100 million and $500 million.

It will be an amount that a majority of legislators in both chambers can agree on, she said. Further cuts and government reforms will come up in the regular session, due to start Jan. 9, she said: “We'll still have a long way to go.”

The Legislature won't vote on Gregoire's request for a temporary half-cent sales tax in the special session. The governor had asked for that by the end of the session to put the proposal before voters in March, and buy back some of the $2 billion in cuts she was asking legislators to approve in the emergency 30-day session.

“I thought that was an overly ambitious assignment from the start,” Brown said.

On Thursday, Gregoire also publically scaled back her expectations, saying she'd be happy with a “significant downpayment” on budget cuts and didn't expect passage of the sales tax proposal.

“I don't see any revenue measures in the special session,” Brown said. Legislators first want to consider reforms and set priorities on programs. Some of the governor's proposed cuts would save money initially by ending programs, but cost money in the long run. One such example is a proposal to make cuts to “critical access hospitals” in rural areas, which actually cost the hospitals double because the facilities would lose federal money as well as state money, she said.

Legislators are also not inclined to eliminate the Basic Health program or the Disability Lifeline, Brown said, or to make cuts in Corrections Programs, as Gregoire has proposed.

Spec Sess Day11: Gregoire says some cuts likely to wait until next year

OLYMPIA — Gov. Chris Gregoire acknowledged legislators are unlikely to pass the $2 billion in budget cuts she proposed in this special session and sees no chance they'll ask voters to approve a temporary half-cent sales tax increase in March.

In a conversation with reporters after a Senate hearing, Gregoire said she now believes whatever budget changes legislators can pass in the special session, it won't be “a full meal deal.”

Instead, she said she would consider “a significant down payment” acceptable, but declined to describe a level of cuts that she would regard as a success for the emergency session, which began last Monday.

But the special session will be valuable, she said, because it will give legislators a head-start on budget discussions which will continue when the regular session begins on Jan. 9. She predicted it will allow the Legislature to pass the earliest supplemental budget in history.

Last year, the Legislature was able to agree on some cuts to the budget during a one-day session in December. “The problem with this budget is, it's a whole new budget. It's not 'We're going to plug a small hole,'” Gregoire said.

Since the special session began, some Republicans have called for government reform in conjunction with cuts, and before any new taxes. Some Democrats have called for a better balance between program cuts and new taxes.

“Everybody's got their slogan,” she said. “At some point we need to get past the rhetoric and get to work.”

Gregoire called legislators into a special session on Nov. 28 after giving them a plan some 11 days earlier to cut about $2 billion in programs and salaries in the face of a looming gap in the budget. She also asked them to ask voters to “buy back” about $500 million of those cuts, through a statewide vote on a three-year sales tax increase.

More than a third of the way into the special session, visible progress on the budget is hard to find. Many legislators who are not in leadership or members of the budget-writing Ways and Means committees have returned to their homes, and the two chambers hold “pro forma” sessions most days.

House and Senate leaders, and the chairmen of the budget committees, have been involved in closed-door discussions among themselves and with Gregoire. The budget committees, meanwhile, have held a series of hearings in which people who rely on state programs for health care, education or social services have described the possible effects of those programs being eliminated. In the early days of the special session, protesters marched through the Capitol with chants and signs, sat down in the Rotunda until being forcibly removed by state troopers and interrupted some budget hearings with demands the Legislature raise taxes rather than cut services.

This week, however, the protesters are absent, as if they, too, are saving their energy for the regular session.

Until legislators settle on an “all cuts” budget and sees the effect those cuts have on state programs, Gregoire said, they won't be ready to ask voters to approve a tax increase like the one she's proposing, a three-year, half-cent increase in the sales tax, with money dedicated to certain public school, college, health care and public safety programs that will be cut from the budget if that tax isn't approved.

That won't  happen by the end of the special session, which means the state will miss the Dec. 31 deadline for proposing a ballot measure for a special election in March. Delaying the chances for a vote on a sales tax increase means it would delay bringing revenue into the state if it passes.

“Every month that goes by that they don't have a budget, we have a bigger hole,” she said.

Spec Sess Day 4: Can they get anything done in Dec.?

OLYMPIA — Legislators have until Dec. 28 to find ways to close the projected $1.4 billion budget gap, and maybe ask voters to raise the state sales tax to save some programs.

Some legislators of both parties have expressed doubt that they can do it in the time allotted, and the fact the regular 2012 session follows the special session by about two weeks has them suggesting some things may just have to wait.

This kind of talk does not sit well with Gov. Chris Gregoire, who called them back for this emergency session with the idea of getting the messy budget stuff out of the way as soon as possible, so savings can start accruing. If the Legislature doesn't agree by the end of the month to put a half-cent sales tax before voters, it can't go on the March ballot.

“I've heard a lot of skepticism from legislators on whether they can get the job done. I'm not willing to accept that,” she said Thursday. “Is there job tough? Absolutely. It's the reality we face today.”

She also took shots at some proposals to increase state revenue without raising the sales tax, as she has suggested, or other taxes. One of them is to expand casino gambling off the reservations. “Voters said,  not all that long ago, 'No,'” she said.

Another one, particularly popular with protesters who continue to march in and around the Capitol, is an end to a tax exemption banks have on first mortgages. That might raise $18 million, which doesn't close much of the budget gap, she said. Closing any tax loophole will take a two-thirds majority in the Legislature and “that just isn't going to  happen,” she said.

Unemployment tax rates to drop, workers comp rates steady

Gregoire at press conference: Show me some real reforms.

OLYMPIA — Most Washington businesses will see lower unemployment taxes and many will have no increase in their workers compensation rates in 2012.

Gov. Chris Gregoire, announcing the new rates for next year, said they represent “real reform” through work with the Legislature earlier this year, rather than the calls for reform some legislators now say are needed before the state considers a tax increase.

“I've been doing reform long before anybody used it as a political football like they are today,” Gregoire said. “No one has come to me with any new ideas that will solve a $2 billion problem.”

The state's General Fund budget has a gap of about $1.4 billion between spending that  has been planned for state programs and salaries, and revenue the state is projected to collect through June 30, 2013. Gregoire has proposed nearly $2 billion in cuts to close that gap and provide reserves to start the next biennium.

Under the unemployment insurance and workers comp rates announced this morning:

  —88 percent of businesses will pay lower unemployment tax rates, and those reductions will be available even for some companies that have laid off workers in the last four years. About 11 percent will pay higher rates because of the level of  benefits paid to former employees.

  —Unemployment taxes will drop in all 40 rate classes. The rate 1 class, which covers some of the state's smallest businesses, will drop by 71 percent. The total amount of unemployment taxes that will be collected by the state in 2012 will drop an estimated $200 million.

  —There will be no general rate increase for workers compensation, for the first time since 2007. Some individual employers will see their rates go up, depending on their claims history or their industry. Of the state's 317 risk classes for jobs and industries, 171 risk classes will go up and 146 will go down or stay the same.

Those rates are a result of comprehensive reform of the workers' comp system the Legislature passed earlier this year. State officials said it would save about $1.1 billion over four years.

Gregoire asks DEA to allow medical marijuana

OLYMPIA — Governors from Washington and Rhode Island asked the federal government Wednesday to reclassify marijuana so it can be used for medical use.

Gov. Chris Gregoire and Rhode Island Gov. Lincoln Chafee petitioned the Drug Enforcement Administration to take off Schedule I, which is reserved for drugs like heroin and peyote that have no medicinal use and thus are illegal under all circumstances.

It should be moved to Schedule 2, which is for drugs like morphine and codeine, which are illegal under many circumstances but can be prescribed by a doctor and filled by a pharmacist for certain conditions.

“It’s time to show compassion and it’s time to show common sense,” Gregoire said. “There’s no evidence to suggest any medical marijuana patient has died from an overdose.”
  

Gregoire’s other tax proposals

Gov. Chris Gregoire's proposed half-penny sales tax increase got plenty of attention Monday, but she also rolled out more than $340 million in additional tax plans she wants lawmakers to consider.

Among them are increased business and occupation tax rates on windfall profits earned in the oil and financial industries to a new luxury tax on automobiles with pricetags over $50,000. Gregoire also suggests imposing additional reporting requirements on local building permits to help crack down on tax-evading subcontractors. Most of the proposals would require an almost-impossible-to-achieve two-thirds supermajority in each legislative chamber, but about $59 million in new revenue could be achieved by simple majority because Gregoire contends it would involve fees and slight policy adjustments.

Gregoire submitted an all-cuts spending plan to balance the state's current budget, which is suffering from an estimated $2 billion shortfall that's forcing lawmakers back to Olympia next week for a special session. But she's also hoping the Legislature and taxpayers will agree to ease the deep cuts in in education and other services by increasing taxes.

A look at the sales tax plan is in today's edition of The Spokesman-Review and can be found at the above link or here.

Click here for the full descriptions of the additional tax proposals that Gregoire supplied lawmakers. Here's a summary, including the amount of projected revenue each would raise during the 2013 fiscal year:

Section One involves proposals Gregoire believes could be approved by simple majority of the Legislature.

  • Convert securities reported as unclaimed property immediately upon receipt ($50.6 million).
  • Require local governments that issue building permits to supply subcontractor
    information to the Department of Revenue ($2.6 million).
  • Reduce the time to claim an excise tax refund to four years ($2.1 million).
  • Increase the interest rate on excise tax assessments by 2% to equal the federal shortterm
    rate plus 4% ($1.2 million).
  • Prohibit delinquent taxpayers from renewing liquor licenses ($1 million).
  • Impose a $10 fee per invoice issued to a taxpayer for unpaid taxes such as balance due
    notices, assessments, warrants, etc. ($900,000).
  • Impose a $25 fee for the issuance and renewal of reseller permits ($700,000).

Section Two involves proposals Gregoire believe would require a two-thirds supermajority.

  • Increase business and occupation (B&O) tax rate on oil companies with windfall
    profits ($131 million).
  • Increase B&O tax rate on financial institutions with windfall profits ($53.8 million).
  • Repeal sales tax exemption for purchases made by nonresidents from states with
    a sales tax of less than 3% ($23.4 million).
  • Limit the B&O tax deduction for first mortgage interest to community banks, defined as those with branches in 10 or fewer states ($18.1 million).
  • Impose 5% luxury tax on passenger motor vehicles with pricetags over $50,000 ($14.2 million).
  • Impose 1.5% gross receipts tax on gambling and lottery winnings ($13.1 million).
  • Increase the cigarette tax 25 cents from $3.025 to $3.275 ($12.4 million).
  • Impose public utility taxes (PUT) on developmental disabilities supported living
    services at 5.029% to help leverage more federal money ($11.6 million).
  • Close B&O tax loophole that allows companies to create shell corporations outside
    the state to reduce their Washington tax liability ($3.5 million).
  • Limit B&O tax preferences for meat processors, fruit and vegetable processors (900,000).
  • Close B&O tax loophole that allows out-of-state printers to sell into Washington
    without paying B&O tax (114,000).

Gregoire: Devastating cuts or sales tax increase

OLYMPIA — Voters could be asked to approve a half-cent sales tax increase next March to help replace a portion of the $1.7 billion in cuts the Legislature will face when it convenes next week for a special session.
Gov. Chris Gregoire said this morning she would propose an “all-cuts” budget that will affect schools, colleges, social services for the poor and elderly and public safety.
“You will see more devastating cuts,” Gregoire said.
She will also ask legislators to let voters approve, through a March referendum, raising increase the state’s sales tax from 6.5 percent to 7 percent for three years, starting in August.
That would raise an estimated $494 million in fiscal 2013, which the referendum would require to be split so that $411 million goes offset proposed cuts to education, $42 million would offset proposed cuts to long-term care and developmental disability services and $41 million would replace proposed cuts to public safety programs.
Gregoire denied that she was proposing cuts to key programs as a “scare tactic” to push through a tax increase.
“These are not hypothetical cuts, they are real,” she said. “I’m being honest with the people of Washington.”
  

Skip regular session? No way, Gregoire says

Gov. Chris Gregoire at Thursday's press conference.

OLYMPIA — While most of Gov. Chris Gregoire's press conference Thursday revolved around the cuts that could be made or should be made, she did field a few questions a bit farther afield.

At one point she was asked what she thought of House Minority Leader Richard DeBolt's recent suggestion that the Legislature do all the work of cutting the budget, and whatever else might need to be done, in the 30-day special session that starts Nov. 28, then save the taxpayers some money by skipping  the regular 60-day session set to start in January. Think they could do that?

“I do not,” she replied. Closing the gap between projected revenues and scheduled expenses will take all of the attention of the special session, even by giving legislators a “jump start” by previewing her budget options a month before they arrive.

“For December, I'm only asking them to focus on the budget…and any crisis we have out there.” In January, the Legislature should “turn our attention to how we put Washington back to work.”

She also denied a recent sale of bonds for the 520 bridge expansion, which relies on variable tolls that would be outlawed by Initiative 1125 if it passes, was intended as a way around the voters, as initiative sponsor Tim Eyman contended Thursday. The state has already begun work on the project, she said, and needs money to pay for it. “That was intended to pay our bills,” she said of the bond sale.

State union to Gregoire: Cut biz tax breaks first

OLYMPIA — The Washington Federation of State Employees has an answer to Gov. Chris Gregoire's request to reopen their contracts and pay more for health care premiums.

It's not quite “hell no” or “drop dead” — or something more colorful but less printable — but it's pretty close.

“Before there’s any talk of taking more from the state workforce she must convene a meeting of corporate entities and ask them to take a 3% cut in any tax break they are already receiving from the taxpayers of the state of Washington,” a message from WFSE Executive Director Greg Devereux, posted on the union's web site, says.

In an interview Wednesday evening, Devereux said the union feels state workers have borne their share of the cuts, a fact which the letter from Office of Financial Management Director Marty Brown basically acknowledges.

Gregoire and other state officials need to look out their windows at the Occupy Olympia protesters encamped on the park grounds below the Capitol, or take note of Occupy Seattle and Spokane demonstrations to realize public sentiment is shifting.

If the governor can convene a group of corporate leaders and get them to agree to giving up some of their exemptions, “we will be happy to come back to the table.”

If not? “We have no interest in going back.”

Gregoire wants to reopen state worker contracts

OLYMPIA — Gov. Chris Gregoire is asking state employees' unions to reopen their contracts and agree to higher health insurance costs.

In a letter to the unions, Office of Financial Management Director Marty Brown cites the projected imbalance of $1.4 billion between projected state revenues and scheduled state expenses in General Fund programs.

“Due to the continuing decline in revenue, the state is requesting that the coalition of unions agree to reooeb the 2011-13 health care benefits agreement in order to negotiate a reduction in the employer premium contribution,” Brown says in the letter.

He acknowledges that unions have made concessions in their current contract, which was approved by the Legislature earlier this year. “However, because of the seemingly unrelenting pressure that the Great Recession has had on revenues and increased caseloads, state employees may be called upon yet again to sacrifice.”

How ‘bout we park that Shuttle in Seattle?

OLYMPIA — The Museum of Flight tried very hard to get one of the nation's Space Shuttles earlier this year when NASA got out of the shuttle business. NASA eventually said no to Seattle and bunches of other cities that covet one of the space ships, and yes to New York, Los Angeles and Washington, D.C.

Now it seems that New York is changing some of its plans for housing the shuttle Endeavour, which is going to create some delays for NASA getting rid of it.

In an effort to help NASA and New York City out, Gov. Chris Gregoire is suggesting the space agency send either Endeavour or Enterprise, which technically belongs to L.A. but isn't there yet, to the Museum of Flight.

Just temporarily, of course, Gregoire said. Just until NYC or LA museums get their act together and build structures worthy of “these priceless artifacts.” The Museum of Flight has the perfect spot to put them for now.

Washington state isn't the only place angling for temporary housing for the shuttles. Dayton, Ohio, was pretty steamed when it didn't land one for the U.S. Air Force Museum at Wright-Patterson Air Force Base. And Houston was similarly p.o'd when Mission Control only got a mockup. Politicians for those to spots have suggested taking Endeavour away from New York City and giving it to their facility.

Gregoire's letter to NASA Administrator Charles Bolden describes the Museum of Flight's offer as an interim plan. But let's face it. Once NASA parks one of those 165,000 pound birds some place, it could be there for a very long time.

Flags at half-staff for White

OLYMPIA — Flags will be flyiing at half-staff at state buildings for state Sen. Scott White, who died over the weekend.

The Kittitas County coroner said White, 41, died of a previously undiagnosed enlarged heart. He was found in his hotel room at a resort near Cle Elum by hotel staff.

Gov. Chris Gregoire ordered the flags to stay at half-staff until after the memorial services are complete.

Does Sesame Street have a governor?

OLYMPIA — Gov. Chris Gregoire's office just revealed one of the year's most eagerly awaited announcements: What  the governor will be for Halloween.

Gregoire and her husband Mike traditionally don costumes and greet kids at the governor's mansion for a couple of hours on Halloween to give out treats. (Don't even think about tricks. The mansion's security is provided by state troopers.)

This year, the governor will be dressed as Elmo from Sesame Street. Mike Gregoire will be dressed as Super Grover, which the office describes for those who are not close followersr of “the Street” as Grover's “super hero alter ego.” Some of the chocolate bars will have tickets to a special holiday reception in December.

Not clear yet is whether Gregoire will be practicing Elmo's high-pitched voice at press conferences between now and Oct. 31.

Decoration and treats are covered by surplus campaign funds. Good thing, because with the state's current budget problems, the office would be hard pressed to buy a bag of candy corn and give it out one kernel at a time.

Gregoire going to China, Japan

OLYMPIA — Gov. Chris Gregoire is racking up the frequent flier miles this month. She's in Washington, D.C., right now for a National Governors Association meeting. Next week, she'll be going to China and Japan.

Gregoire is leading an NGA delegation to Beijing that leaves Monday, a spokeswoman said. That organization is paying the cost of the trip for her and an aide. She'll also have a couple state patrol officers accompanying her for security, which will be covered by the state.

Also making the trip will be governors from Georgia, Hawaii, North Carolina, Guam and the Northern Mariannas Islands.

After finishing in Beijing, Gregoire, her aide and security folks will make a brief side trip to Tokyo where she will meet with two Japanese companies that have manufacturing facilities in Washington and are looking to expand. One company makes carbon fiber parts for Boeing and is thinking of expanding into the automobile field; another makes silicon wafers.

The group is scheduled to return to Washington state on Friday.

Total cost to the state for the trip is still being calculated.

DSHS’s Dreyfus leaving at year’s end

OLYMPIA — Susan Dreyfus, the director of the Department of Social and Health Services, is leaving after the end of the year.

Dreyfus will stay through the upcoming special legislative session, which begins Nov. 28 and is expected to take a big chunk of the $2 billion hole the state needs to fill out of DSHS. She's taking a  job with Families International, Inc., a nonprofit organization that has three other nonprofits under its umbrella. Its previous director died in August.

Gov. Chris Gregoire appointed Dreyfus to run the state's mega-agency in May 2009; at the time she was the chief operating officer for the Alliance for Children and Families and Families International in Wisconsin.

The governor will likely make an interim appointment before the end of the special session, her office said.

Special session on budget starts Nov. 28

OLYMPIA — The Legislature gets to spend the month between Thanksgiving and Christmas playing Scrooge to state agencies.

Gov. Chris Gregoire said she is calling legislators back for a special session starting Nov. 28 to deal with declining revenue projections that are likely to decline even more before they get here.

Nov. 28 is the Monday after Thanksgiving, and by law a special session can last up to 30 days. How long it lasts is up to legislators, who will be wrestling with Gregoire's request to cut $2 billion out of the budget they approved for the 2011-13 fiscal cycle just five months ago…

Gregoire: No special session before November

Gov. Chris Gregoire at the Suncadia Lodge.

CLE ELUM — Washington's economic outlook is so much more likely to get worse in the next two months that Gov. Chris Gregoire said she won't call the Legislature into a special session until November.

“It would be premature for me to call them back before the next forecast. They need to know how large the problem is,” Gregoire said.

Speaking to the annual “policy summit” of the Association of Washington Business, Gregoire said the state's chief economist has told her it's about four times more likely the state's revenue outlook will be worse for his November forecast than it was last week. That's when he said the state can expect a drop of about $1.4 billion from the amount the Legislature expected when it wrote the 2011-13 general fund budget.

Before last week's forecast, Gregoire told state agencies to prepare plans to cut 5 percent and 10 percent from their current appropriations. But Chief Economist Arun Raha's forecast last week essentially blew those apart.

“Neither of those would be enough,” she said.

The asssociation, which represents businesses throughout the state, is holding its annual conference at the Suncadia Lodge, a golf, winery and lodging complex on the eastern slope of the Cascades. Advocates for higher taxes on businesses are massed at the entrance, demanding an end to tax preferences — they use the term loopholes — for businesses rather than another “all cuts” budget.

Gregoire didn't mention a tax preferences of a tax hike in her talk to the business leaders, and none asked her about them in the brief question and answer session after her speech. But she left open the prospect that the state would consider some, urging the crowd “everything is on the table” — presumably taxes as well as cuts.

“I'm asking you… not to draw lines in the sand,” she said.

Tacoma Schools, teachers being called to Principal Gregoire’s office

OLYMPIA — Tacoma School officials and the teachers' union there may be headed for detention.

Gov. Chris Gregoire said that if they haven't settled the strike by 3 p.m. today they “will report to my office and stay untill their differences are reconciled and the school doors reopen.”

“There is no question that the Tacoma teacher strike has continued far too long — disrupting the lives of families and the 28,000 students who need to be in school,” she said. At her direction, the two sides went back to the bargaining table this morning with a 3 p.m. deadline.

Corporal punishment has been banned in public schools for quite some time. Not sure if that applies to teachers and administrators. If not, should it be Gregoire applying the paddle or one of her state patrol security guards?

With bad revenue forecast, can special session be far behind?

OLYMPIA – With economic recovery described as “a mirage in the desert” and a projected gap between income and spending growing to $1.4 billion, state officials began setting the stage Thursday for a special legislative session that would find ways to cut more from the budget.

“The November forecast may bring more bad news so we can't wait until the start of session in January to take action,” Gov. Chris Gregoire said in a prepared statement released as the Economic Forecasting Council ended its meeting. “Today's forecast demands that we take action.”

Arun Raha, the state’s chief economist, told the forecasting council that tax collections fell below projections this summer, and the Washington economy can expect continued problems over the rest of this two-year budget cycle.

Jobs aren’t coming back at a pace that is lowering the unemployment rate. Foreclosures are likely to go up and home construction is off. State revenues may be about $500 million below previous projections through June 30, 2012, and $900 million lower in the next fiscal year. Normal economic times “seem like a mirage in the desert, the closer we get to it, the further it moves away,” Raha said.

The four legislators on the council all seemed to expect some type of session to be called this fall, although they disagreed on how it might be structured or what it should consider…
  

To read the rest of this post, go inside the blog.

Figure out cuts of 5% and 10%, agencies told

OLYMPIA – State agencies will prepare plans to cut their budgets by as much as 10 percent as Washington braces for the prospect that the next state economic forecast could be worse than the last one.
Orders were sent Monday to agencies that rely on the state’s general fund to identify what they would cut if their budget was reduced by 5 percent, and what they would cut if it was dropped another 5 percent beyond that.
Marty Brown, director of the Office of Financial Management, said the instructions are indirectly related to the ongoing federal debate over raising the debt ceiling. But the fact they came on a day when the Dow Jones Industrial Average dropped more than 600 points was a coincidence, he added.
“I wish we were that well-prepared,” Brown said when asked about a link to the stock market plunge…
  

Loesch named Gregoire chief of staff

OLYMPIA — Marty Loesch was named chief of staff for Gov. Chris Gregoire today, filling the spot opening up because Jay Manning is stepping down.

Loesch, 46, is currently Gregoire's chief of external affairs and senior counsel. He previously worked as inter-governmental affairs director and tribal attorney for the Swinomish Tribe. He takes over for Manning on July 18.

Manning announced he was stepping down last month, shortly after Gregoire announced she would not seek a third term.

Warner named Corrections Secretary

OLYMPIA  — Bernie Warner spent less than a week as Washington's acting Secretary of Corrections.

Today Gov. Chris Gregoire took the “acting” out of the title and named him as her choice to to be the permanent replacement for Eldon Vail, who resigned last Friday as he faced the prospect that an affair he was having with a subordinate was going to become public.

Gregoire's office announced she had appointed Warner to the job with a salary of $147,000, the same salary Vail has been making. His appointment must be confirmed by the Senate, but that won't happen before the Legislature returns to a session. Unless there's another special session this year, the Legislature isn't scheduled to meet until January.

Warner sent a memo to Department of Corrections employees, say his goal was “to provide you with the high level of leadership you deserve.”

Vail told The Seattle Times in an interview that he resigned because he believed an affair he was having with a subordinate would be made public by someone who may have videotaped them leaving an Olympia motel. He said he took full responsibility for his actions, and is working on saving his marriage. The subordinate continues to work for the department.

A spokeswoman for Gregoire said the governor was not calling for an investigation “at this point” because Vail has resigned.

State prisons chief Eldon Vail resigns

Three days after a man who shot seven people at the Tacoma Mall took a prison guard hostage and a convicted Spokane killer was shot to death on a fork lift, state prisons chief Eldon Vail has resigned.

Gov. Chris Gregoire, who reportedly learned about Vail's decision just today, quickly named a temporary replacement. Jim Camden has more at Spin Control.

Look for a story in The Spokesman-Review next week examining the Department of Corrections' reaction to the eye-gauging assault at Airway Heights Corrections Center last fall by a man already convicted of murdering a cellmate.