State Budget Crisis

Governor Chris Gregoire is telling state agencies to prepare for further budget cuts because of the faltering economy. Her budget office today asked agencies for ideas to reduce planned spending by 5 or 10 percent. 

Meanwhile, the Standard & Poor's downgrade of federal debt is unlikely to have much near term effect on the borrowing costs for the state. Although, S&P did deal the city of Tacoma a blow by downgrading it's credit rating on debt backed by the federal government.

With the loss of revenue, the impact of inflation and rising population, Washington’s government is providing one-fifth (18 percent) fewer services.

That’s instruction in K-12, colleges and universities, road maintenance, health and welfare agents, building inspectors – you name it.

By the time this economic decline in government services gets ironed out, Washington could shed up to 20,000 government jobs statewide, says Seattle economist Dick Conway, who is also co-publisher of the Puget Sound Economic Forecaster.

This season of state budget cuts in Olympia was different than previous bad-budget years, not just in size and scope – but also because the Legislature eliminated many small programs rather than suspending them so they can be brought back online more easily in better times.

“That’s different,” said Marty Brown, director of Washington's Office of Financial Management.

The $4.6 billion in cuts that resulted in the state’s current $32 billion two-year budget contained many program eliminations that surprised even veteran budget wonks like Brown.

Washington budget writers just can’t catch a break. Earlier this week, state income had fallen another $22 million short of forecasts. That’s on top of a forecasted revenue slump that will leave the state with only $163.3 million in reserve by June 2013.

All of which comes on the heels of the Legislature’s $32 billion two-year budget that cut $4.6 billion.

We’ve heard about the big cuts to education and a few other programs – such as closing the state tourism office, the quit cigarette hotline, living will registry and ending film industry incentives. Now, here’s 10 small programs cuts that will affect the way at least some Washington citizens live their lives:

Flickr

Today Washington state closes its official tourism agency making it the only state in the nation to abandon all funding for self-promotion. The closure comes at a time when tourism is one of the fastest growing economic sectors in the world.

Gov. Chris Gregoire has signed a measure giving the state's six four-year colleges and universities ability to set tuition.

At the bill signing ceremony at a Seattle high school Monday, The Boeing Co. and Microsoft Corp. also announced that they would each pledge $25 million over the next five years to a new scholarship program and endowment which Gregoire also signed into law Monday.

Seattle voters will have a chance to chime in again on the planned deep-bore tunnel that's supposed to replace the Alaskan Way Viaduct. 

That's the word from Judge Laura Middaugh who this afternoon sided with the supporters of a referendum, saying  her goal is to make sure that the voices of the people are heard when a policy decision is made.  She said she had not been able to find any precedents in case law to support her stance.

A week of protests over state budget cuts culminated with a large union-led rally Friday at the Capitol in Olympia.

The State Patrol estimated the crowd at 7,000 people. There were signs and chants, and a sea of unionized workers on the steps to the Capitol and Supreme Court. 

Washington House Democrats are considering a plan to lease the state's liquor distribution system for $300 million cash up front. But it wouldn't come cheap.

Initially, the deal could cost the state 80 percent of what it currently collects from the wholesale distribution of booze. That's according to a memo marked "highly confidential." It comes from a newly formed company called Washington Beverage and outlines a proposal to take over from the state the distribution of hard liquor throughout Washington.

Washington House Democrats have unveiled a plan to close a $5 billion shortfall over the next two years. The plan released Monday would close a $5 billion shortfall and yet still manage to save several programs the governor proposed to eliminate.

It would privatize the state’s liquor distribution center and impose a $10 state park fee. It would also allow for the early release of some prison inmates. House Budget Chair Ross Hunter (D-Medina) calls it a responsible and sustainable budget.

AP

Making headlines around the Northwest this morning:

  • Lawsuits Blame Top WaMu Execs
  • Deeper Cuts for State Ahead
  • New Findings in Port Orchard Wal-Mart Shooting

 

Killinger on FDIC Allegations: "Fiction"

Negligence led to the nation's largest-ever bank failure, claims the Federal Deposit Insurance Corporation (FDIC), which filed suit against former Washington Mutual leaders Kerry Killinger, David Schneider and Stephen Rotella. The Seattle Times' Sanjay Bhatt reports the FDIC wants:

Washington's budget shortfall has grown to more than $5 billion. That's after Thursday's state revenue forecast. Advocates on the left immediately intensified their calls for lawmakers to end corporate tax exemptions. The Governor warned the legislature to avoid budget gimmicks.

HeatherL / Flickr

First the state Senate, now the House. Either way, it’ll cost you ten bucks to visit a Washington State Park for the day if the legislature passes measures now being considered in Olympia.

Undocumented immigrants would lose state medical coverage under a proposal to save the popular Basic Health insurance program. The get-tough measure is part of a budget-cutting plan unveiled by the State Senate. But it's at odds with a competing approach in the House.


In a single day, Washington cut more than 5,000 families from the state's welfare-to-work program. That's because a strict, five-year limit on benefits kicked in. It's a cost-cutting measure ordered by the Governor.

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