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Inslee cuts state budget, expecting pandemic to cause revenue to drop

Gov. Jay Inslee addresses media outside Nourish Pierce County, where Washington National Guard members began packing food there earlier, Friday, April 3, 2020, in Lakewood, Wash. (Elaine Thompson / AP)

OLYMPIA – With Washington facing a sharp drop in revenue from closed businesses and homebound consumers as a result of the COVID-19 pandemic, Gov. Jay Inslee cut some $235 million in state spending for the next 15 months.

With a series of vetoes, the governor cut a wide range of programs from the 2019-21 Supplemental Operating Budget. If the Legislature doesn’t decide to replace them next year, it would drop projected spending for the next two-year budget by another $210 million.

In February, the Legislature was told to expect $606 million in extra revenue because of a thriving economy. That economy turned south in March with the outbreak of COVID-19 in Washington and around the country, which prompted Inslee to order closures of nonessential businesses and Washington residents to “Stay Home, Stay Healthy.”

Before leaving Olympia on March 12, legislators pared back their spending, but not enough to absorb the shock of record unemployment claims and an uncertain drop in tax revenue. The state’s biggest sources of revenue include sales taxes and a business and occupation tax based on a company’s gross receipts.

“There’s going to be people disappointed by these vetoes. I share the pain,” Inslee said.

The cuts ranged from several thousand dollars to tens of millions, Inslee said, and include some programs he strongly supports, like $100 million for additional school counselors, a program he “believes in very deeply” because his father was a high school counselor.

Also sliced from the budget, $50 million for a fund to fight climate change, which was Inslee’s signature issue in his brief presidential run last year.

All cuts involve new programs the Legislature approved this year, which were also vetoed; spending for current programs wasn’t cut, although lawmakers could do that in the coming months. The state also has some $3 billion in its reserve accounts, he said.

Legislative leaders backed Inslee’s decision to veto the new programs and reduce the expenses in the coming months.

In a news release, Rep. Timm Ormsby, D-Spokane, and Sen. Christine Rolfes, D-Bainbridge Island, the leaders of the budget committees in the two chambers, called them difficult but necessary with the dramatic change in the state’s economy.

“The health and safety of all Washingtonians is paramount, and these reductions will help our state remain nimble as we face declining revenues,” they said.

Republican leaders were supportive, but said Inslee could have cut more.

Centralia Republican John Braun, the Senate’s chief budget writer, said he appreciated Inslee’s efforts but had urged him to “pump the brakes harder.”

“A case could have been made for vetoing every bit of new spending that doesn’t support the state’s COVID-19 response,” Braun said in a news release. That could have reduced the budget by some $700 million, which could have been used for public health costs or recovery efforts down the road.

Inslee said he expected some disagreement with his decisions.

“Any number we pick would be subject to criticism as too big or too little,” he said. “If we did not have a $3 billion reserve, I would agree with that (Republican) criticism.”