WALLA WALLA - On Dec. 11, the Legislature met for a special session called by Gov. Chris Gregoire to reconcile, as best as possible, a $1.1 billion gap between expected revenue and spending. After severe cuts to education, social services, prisons and health care, lawmakers trimmed about $588 million.
Senate Minority Leader Mike Hewitt commented in an interview on the current state of the budget and a preview of what is to come in the legislative session that opens Monday.
"If you don't have any money, you have to do what you have to do," Hewitt, R-Walla Walla, said about the cuts in December. "We do not have enough money to carry us through."
The Washington state budget operates on a two-year cycle. During the cycle that will end June 30, nearly $75 billion will be spent on statewide programs and services, transportation and construction projects. Nearly 70 percent of the budget, including mandated spending for basic education, pensions and Medicaid, is constitutionally protected and cannot be cut.
With tax revenues falling, spending has exceeded the taxes coming in.
Hewitt said overspending has been a concern for many Republicans.
"Some of the things we've been asking for, that the governor has requested now, are things that we've been asking for four or five years to balance the budget and make it sustainable," he said. "We weren't surprised by some of the things that she was asking for."
On Monday, the Legislature will convene for its 105-day session, when the House and Senate will negotiate further budget cuts to mitigate this year's remaining deficit and the projected $4.6 billion shortfall in the 2011-2013 budget cycle.
The emergency session cut $50 million from public school funding to help offset the $1.1 billion gap. Funding to reduce class-size from kindergarten to fourth grade was eliminated. Previously, schools hired extra lower-level elementary teachers with the state funds to offer smaller classes. Starting in February, schools will have to pay for those additional K-4 teachers directly when the state stops providing payments.
Walla Walla Public Schools Superintendent Mick Miller estimates the elimination of these class-size reduction funds will cost the district about $350,000, just a portion of total revenue loss. Miller, however, credits the School Board and the previous administration for reserving funds in anticipation of a financially lean year.
Also, the district has seen an unexpected increase of 140 students enrolled in public schools.
"As we get more students, we get more state dollars," Miller said. "We know that we have these reductions, but our budget is in a healthy spot. We hope to keep programs and positions the same for next year."
In the governor's proposed 2011-2013 budget, an estimated $2.2 billion will be cut from K-12, the largest component of the state budget. Cuts include eliminating the highly-capable program; eliminating or reducing non-basic programs; suspending the Student Achievement Program, which provides flexible funds to classrooms for improved learning; and suspending salary increases.
Miller said, "I can categorically say that we're going to have a highly-capable program (next year). We're going to find money to make sure that operates."
The budget proposal also includes the reduction of a subsidy program to low-tax and primarily rural school districts. This will be another loss to the district.
Gregoire recommended many of these cuts take effect earlier than the next budget cycle, which will start July 1.
The Dec. 11 session cut $51 million from higher education, including $26.4 million from community and technical colleges.
Walla Walla Community College President Steven VanAusdle said the governor's proposed budget includes a 10 percent increase in tuition at the college. The college also will face significant cuts in state funding over the next two years.
"In tough economic times, community colleges play a major role in economic recovery. Individuals who are laid off and realize productivity is key, those individuals go back to receive an education," VanAusdle said.
The college has slashed its budget by 23 percent, yet has seen an increase in enrollment by 30 percent since 2008.
"More students have enrolled at Walla Walla Community College than we've ever had on our campus or at our learning centers before," VanAusdle said about this winter quarter.
The governor's proposed budget includes a 3 percent reduction in salary to staff and faculty, the community college president said.
Hewitt said, "The higher education institutions have been the piggy bank in the past few years when we're in financial trouble. They're the first one that gets cut."
VanAusdle said he was "extraordinarily proud" of staff and faculty who have been able to serve more students with less money by increasing their own workload voluntarily.
Department of Corrections
In December, lawmakers cut $48.4 million from the Department of Corrections, including the closure of McNeil Island Corrections Center by April 1. State agencies, including the Department of Corrections, have been ordered to implement a 6.2 percent across-the-board reduction in spending.
"We should not be cutting (corrections) because of safety factors. We're at the point where the ratio of staff versus inmates is very low and that becomes an untenable situation for those corrections officers," Hewitt said.
The penitentiary has implemented monthly lockdowns, staff furloughs and program reductions to limit costs. Deputy Director of Prisons Dan Pacholke estimated the Washington State Penitentiary has cut $270 million over the past three years.
"We're a much leaner agency than we were a few years ago," Pacholke said. "The last three years have produced some ingenuity. Everyone has been very creative about how to operate in what can only be called a zero-money environment."
On a brighter note, the penitentiary may break ground on much-needed facilities later this year.
The governor's proposed budget preserved $49.9 million for the construction of two new medium-security facilities and the expansion of the West Complex kitchen facility. The design and planning of the facilities began last year and should be completed this summer.
Port of Walla Walla Executive Director Jim Kuntz said, "It's a good initial sign that the governor has included expansion of the Washington State Penitentiary as a capital priority."
The preservation of these construction funds, however, still needs to clear the House and Senate.
"It's a long way from being adopted. There will be lots of debates," cautioned Kuntz.
Former legislator and lobbyist Dave Mastin said the time for the project is now.
"Building the facilities and appropriating money in the capital (construction) budget is good public policy. Waiting doesn't make it less expensive," he said.
"The Port has done a fantastic job leading this coalition. Our legislators have been at the forefront - Sen. Hewitt, Rep. Nealey and Rep. Walsh - all strong advocates for our effort," Mastin said. "This is about jobs in our community, about public safety and what makes sense from a statewide perspective. At the local level, it's about trying to preserve as many jobs as we can."
The governor's budget proposal eliminates the Basic Health Plan, which provides subsidized medical insurance to about 66,000 low-income individuals. The budget also would eliminate Disability Lifeline, which offers cash payments to the disabled poor who do not receive federal aid but are unable to work. These two programs are estimated to cost nearly $560 million in state funds and $117 million in federal funds.
The emergency session also reduced payments to federally qualified health-care centers and emergency payments to needy families, and eliminated nonemergency dental care for the poor.
In a written statement that accompanied the budget proposal, Gov. Gregoire wrote, "The reality of this recession is that it has dismantled many of the programs that I, and millions of others in the state, value ... In any other time I would not sign this budget."
The proposed budget also includes the elimination of the Children's Health Program, which offers medical coverage to 27,000 children without documentation of citizenship.
"It's just going to be a tough year. There are some very tough decisions that have to be made. Our priority will be to take care of the most vulnerable in the society," Hewitt said.
Some of the "safety net" programs will need parameters, he said.
"We're going to have to give people expectations that they cannot live off these programs forever. We're going to have to have deadlines for them to get off, give them the ability to get off ... or we're going to have to give them some kind of training to get them back in the work force," he said.
The governor's proposed budget is estimated to save $1.4 billion by reduced spending in health and social services.
Tax increases as a source of revenue appear unlikely after the November election, when voters rejected a state income tax proposal, ended the candy and soda tax and reinstated a two-thirds legislative majority or statewide vote to raise taxes.
The emergency session budget cuts included $205 million from federal aid, $54 million from fund transfers and $76 million by delaying an education payment until the next budget cycle, Hewitt said.
"We didn't get any long term value out of that (Dec. 11 budget) bill that passed ... Out of all of it, (we recognize that) only $300 million will carry forward into the next biennium. That will help us. And we have to make some serious decisions about how to get through the next biennium and the biennium after that."
"I'm very hopeful the economy turns around and that revenue starts coming back (so) we can take care of services," he said. "This is a real opportunity to look at core values of what government does and whether we should fund them or not."