Gregoire’s budget closes $5.7 billion shortfall

Proposed budget has something for everyone not to like

 

Gov. Chris Gregoire released her 2009-11 biennium budget proposal on Dec. 18, which would close a projected $5.7 billion shortfall without raising taxes through a combination of program reductions, suspension of state employee pay increases, pension changes, increased federal contributions and the use of the state’s rainy day fund. The proposed budget now goes before the state Legislature, which will approve a final budget in the spring.

The most significant proposed cuts were in human services and higher education, which could mean a bleak couple of years for Bellingham’s Department of Social and Health Services (DSHS) office and state institutions of higher learning.

“The deepening national recession is already the longest in a quarter-century and has resulted in dramatic budget gaps in states across the nation,” Gregoire said in a press release. “Our state is not immune and our revenue — largely reliant on a sales tax — is down significantly, resulting in the largest budget gap in state history.”

According to the Washington State Department of Revenue, the state lost $2.8 billion in the second half of 2008 — $1.9 billion in November alone. However, the governor has remained true to her campaign promise to not raise taxes.

“Now is not the time to be raising taxes on our residents and businesses,” Gregoire said. “Our families are tightening their belts, and that’s what government needs to do. The state must squeeze every ounce of value from each taxpayer dollar while maintaining our priorities of protecting families and children the best we can.”

Instead of raising taxes, one way Gregoire is making up the budget shortfall is a proposed $478 million budget cut to human services, including several programs that service the state’s most vulnerable populations, most notably, the General Assistance-Unemployable program, which provides monthly grants to more than 21,000 people temporarily unable to work.

The budget would also cause the state to lay off 2,600 human service workers, with 1,000 of those coming from DSHS.

 

Thomas Shapely, director of communications for DSHS, said while the budget proposal is grim, it must still pass through the legislature in the coming months.

“It’s still a bit too early to know how the budget cuts will impact Bellingham directly,” Shapely said.

However, he said Gov. Gregoire has proposed a supplemental budget for the rest of fiscal year 2009, which ends on June 30, 2009, that incorporates many of the things DSHS has already been doing to cut costs as the economy worsened in the last two months, such as instituting a hiring freeze and elimination of temporary positions and vacancies and cost reductions.

Shapely agrees with the governor’s decision to institutionalize some of these cuts before the end of this fiscal year because the benefits often take time to be realized.

“The sooner we start these reductions, the more effective and efficient they will be in the upcoming biennium,” he said.

When DSHS looks to cut costs, Shapely said, it first reduces the rates it pays contractors, then reduces services, and finally, at worst, it tightens eligibility standards to serve fewer people.

“Even with this tremendous drop in revenue, there are many things that we will be able to continue with, and we did that by changing our rates with contractors,” Shapely said. “We always hope we never have to cut services, but unfortunately we really missed that with the (proposed) cuts to GAU (General Assistance-Unemployable).”

To add insult to injury, as DSHS freezes hiring and faces layoffs, social workers’ caseloads are swelling as they struggle to meet the increasing need for social services.

“There will definitely be longer wait times,” Shapely said.

In higher education, Gregoire proposed $300 million in “across the board” cuts with 13 percent funding reductions for state universities and 6 percent reductions for technical and community colleges.

“Higher education institutions are given the flexibility to determine how best to implement this reduction,” according to Gregoire’s budget proposal and policy highlights. “Effects on campus could include fewer course offerings, larger class sizes, reductions in faculty positions and fewer support services for students.”

Colleges have also been authorized to raise tuition.

“On average, tuition can increase by about $450 per year at the research institutions, $310 per year at the regional college and universities, and $125 per year at the community and technical colleges,” according to the budget proposal and policy highlights.

In an e-mail and blog post to the university community, Bruce Shepard, president of Western Washington University, wrote that the governor’s budget would decrease state support overall by 14 percent and increase tuition by 7 percent a year, an average increase of $100 per student per quarter in each year.

However, the news isn’t all bad. Funding for Western’s top capital projects, renovations to Miller Hall and Carver Gym and stabilizing the Armory building, were included in the budget.

Shepard said while the net reduction is “significantly larger than any this university has experienced in recent decades,” he recognized that the governor had to make some hard decisions.

“The governor has, in my view, acted with great courage and vision under very difficult circumstances in making politically hard choices to spread the pain,” Shepard said in his message to the campus community.

Shapely said it is important to remember that this is just a proposal from the governor and the exact fate of these state institutions will not be known until later in 2009. The state Legislature will return to work after the first of the year and normally waits until the state’s economic forecast in March to pass a budget.

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