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OLYMPIA BLOODBATH - Gregoire and the 2010 budget
Section One
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OLYMPIA BLOODBATH - Gregoire and the 2010 budget

by Mike Andrew - SGN Staff Writer

On December 9, Gov. Christine Gregoire announced a state budget for 2010 that would totally eliminate critical services for poor and disabled residents of the state.

At the same time, she said she had no intention of implementing all the cuts she was announcing.

Washington state faces a projected $2.6 billion revenue shortfall for 2010. The Governor is required by law to present a budget that is balanced using existing revenue.

Consequently, Gregoire's budget totally eliminates the Basic Health Plan, a state-subsidized insurance program for the working poor, saving about $161 million over the next fiscal year.

The Basic Health Plan had been touted as a model for subsidized health insurance in the ongoing national healthcare debate. Some 65,000 people are currently enrolled. Few if any have prospects of securing market-rate health insurance.

Also eliminated would be the General Assistance-Unemployable (GAU) program, which provides a temporary safety net for people unable to work because of mental or physical disabilities. That would save $207 million.

Some 22,000 people annually use GAU grants to provide their minimum food, medical, and housing expenses. The proposed budget would suspend funding for school levy equalization, which provides money to "property-poor" school districts, saving $110.6 million. Since school districts derive most of their revenue from property taxes, districts with low property values require state subsidies to be able to provide educational services at levels comparable to richer districts.

The budget would also suspend state-subsidized all-day kindergarten, saving another $33.6 million. State-subsidized all-day kindergarten has been offered as a pilot program in a few school districts with the intention of expanding it statewide.

The budget cuts $146 million in financial aid for college students and lowers the qualifying income threshold from 70% of median family income to 50%. That means the money would only go to the lowest-income families. The size of the grants would be smaller as well.

All told, the governor's budget would reduce spending by about $1.7 billion. The remaining $900 million would be made up by shifting money among specific state funds and tapping reserves.

Most of the state budget is off-limits to cuts because it is protected by the state constitution - such as funding for K-12 education - or by federal requirements - such as the state's share of Medicaid, a federal-state insurance program for the poor.

"THIS IS NOT A BUDGET I CAN LIVE WITH"
Gregoire quickly disavowed the draconian budget cuts she announced.

"This document is not true to the values I believe in and which have guided me through a 30-year career in public service," she said in a letter released by her office on the same day as the budget. "It is not a budget I can live with, nor is it one I believe Washingtonians can live with."

Gregoire plans to issue a revised budget in early January, just before the legislature reconvenes on January 11.

"My second budget will more adequately fund our public schools, pay for the basic safety net for our most needy, help more of our students achieve the higher education they need, and set the stage for a more prosperous future," Gregoire's letter said.

Her office has not detailed options for raising more money. However, Democratic leaders in the state House and Senate joined her recently in calling for new taxes to help close the budget gap.

Gregoire said she expects new taxes to cover the GAU, the Basic Health Plan, school levy equalization, financial aid for college students and a shortlist of other state services worth about $700 million combined.

The Governor also said she expects to secure federal funding for some programs.

"I anticipate the legislature may receive good news from the federal government concerning reimbursements for some of our safety net programs," she said.

Gregoire added that she expects to ask for about $1 billion in actual cuts.

Until the legislature convenes and begins to tackle the budget, it remains unclear which cuts are likely to remain and how new taxes will be raised.

State Budget Director Richard Moore cited a proposed $89.5 million cut in funding for colleges and universities as an example of a cut that will probably remain in the final budget.

"That would be tough to restore," Moore said, adding that increasing tuition to make up for the cuts isn't an option.

"They'll just take the cut," he said. "I think you'll see fewer class offerings. I think you'll see bigger class sizes."

The Governor also said she would take administrative action to close all or part of nine state prisons to save money.

Ahtanum View, Larch and Pine Lodge prisons would be closed under the Governor's plan. In addition, a wing at the state prison in Walla Walla will be closed, and the McNeil Island Corrections Center would be downsized from a maximum-security to a minimum-security facility.

Those moves and consolidation of inmate beds elsewhere are expected to save $65 million over the next three years.

On the revenue side, the Governor seemed to foreclose the possibility of a state income tax, long a favorite budget remedy of progressives. Instead, she hinted she might opt for more limited adjustments to the state tax code.

"With regard to revenue, we should first look at eliminating unfair and unproductive exemptions and loopholes. & While it is evident we cannot cut our way out of this budget dilemma, it is just as certain we cannot tax our way out of it," Gregoire said.

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