Thursday, December 18, 2008

The longer short version of Gov's budget proposal

Lots of budget info to share here, so our apologies for the longer-than-usual blog post. For a look at some of the early news reports, visit here, here, here and here.

The Governor’s budget proposal makes it clear, if it wasn’t already, that our budget situation is dire. The budget cuts she proposes do affect our children, our seniors and many other vulnerable folks in our state such as those with disabilities. Her proposal marks the start of the budget-crafting process and when the Legislature convenes next months, lawmakers will take the torch and craft proposals of their own.

But for a review of where we’re at today with the Gov’s proposal, here’s a sample of the kinds of cuts we’ll be looking at. Complete documents can be found at OFM’s website.

Federal Funding: Governor Gregoire has assumed that Washington will receive about $1 billion in federal funding. About $779 million would be increased Medicaid funding. Additional federal dollars are also expected through the reauthorization of the State Children's Health Insurance Program (SCHIP). Also, the state is expected to get additional funds for the Temporary Assistance for Needy Families (TANF) program.

Compensation: This budget does not include funding for state employee raises. The Governor does not fund the cost-of-living adjustments for K-12 employees under Initiative 732. Together, these compensation reductions save $680 million.

Pensions: Governor Gregoire saves about $400 million in contributions to the state's pension systems.

Revenues: The proposal does not include tax increases, and increases only one fee that deals with federal cleanup activities at Hanford. It does assume additional revenues from additional liquor store hours and additional enforcement from the Department of Revenue.

K-12: Initiative 732 is not funded (saves $349.2 million). Governor reduces funding for Initiative 728 (classroom size reduction) activities by $178 million. Levy equalization, the match the state provides to "property poor" districts, is cut by 33%, saving $125.4 million. Other reductions include: Not funding the two state-funded professional development days for math and science (saves $39.7 million), and elimination of numerous programs and grants totaling $60.8 million.

Higher Education: Four-year universities take a 13% reduction and the community and technical colleges take a 6% reduction (savings of $342 million). Eligibility for the State Need Grant is reduced though the Governor funds increases in the state need grant required to cover tuition increases.

Early Learning: The Department of Early Learning will cut $3 million by suspending the Career and Wage Ladder, $2 million from suspending the Family, Friends and Neighbors program and $1.7 million from eliminating state support for the Child Care Resource and Referral Network.

Health Care: Reductions here include:

· Reducing Basic Health Plan funding by 42% - saves $252 million

· Supending coverage of children between 250 and 300% of federal poverty - saves $6.1 million state, $7.9 million federal

· Eliminating medical care for the General Assistance - Unemployable (GAU) program - saves $251.3 million

· A 1% reduction to rates paid to Medical Assistance managed care plans will continue through the biennium - saves $37.7 million state, $49.2 million federal

· Hospitals, excluding psychiatric ones, will see their inpatient and outpatient rates reduced by 4%- saves $46.9 million state, $53.9 million federal

· The state will no longer purchase all vaccines for children not covered by Medicaid - saves $49.6 million

· Increasing use of generic drugs by 20%, consolidating drug purchasing and reducing coverage for some drugs – saves $108.6 million state, $280.8 million federal

Human Services: These reductions are all in the Department of Social and Health Services:

· Discontinuing the Adult Day Health Program - saves $20.3 million state, $20.3 million federal

· Eliminating the General Assistance Unemployable (GAU) program - saves $160.6 million. "Offset" funding of $20 million for emergency housing and $40 million for community clinics is provided.

· Closing the Yakima Valley School, a developmental disabilities institution - saves $1 million state, $600,000 federal. Funding is provided for community settings.

· Medicaid nursing home rates are scheduled to go up by 2.5% on 7/1/09. The Governor proposes to reduce rates by 7.5%, so the net reduction is 5% - saves $46.2 million state, $42.6 million federal

· Mental Health Services provided through regional support networks are reduced. Medicaid rates down by 3.2% and non-Medicaid rates down by 7.4 % - saves $30.5 million

· TANF sanctions will be accelerated - saves $30.4 million

· The budget assumes that Initiative 1029, passed in November, will be suspended for two years – saves about $29 million

· Secure crisis residential centers are eliminated - saves $9.4 million

Public Safety: The Governor is proposing a number of changes in the state's corrections system. They include:

· Elimination of supervision for misdemeanants - saves $31.7 million

· Discontinuation of community supervision for low-risk offenders, except for sex offenders and violent offenders - saves $9.9 million

· Setting of community custody sentence lengths at 12 months - $27.2 million

· Early release for elderly and ill offenders - $1.5 million

· Deportation of non-citizen offenders with property or drug offenses - $9.1 million

The Governor is also proposing to close Naselle Youth Camp - saving $12.9 million; reducing funding to expand evidence-based programs in the Juvenile Rehabilitation program - saving $8.7 state, $1.4 million Reinvesting in Youth Account; and reducing chemical dependency treatment funding for adult outpatient and residential services - saves $11.4 million.

Natural Resources: The Governor is proposing the following:

· Closing some state fish hatcheries - saves $6.6 million state, $1.7 million other

· Closing 13 state parks - saves $5.2 million

· Reducing local watershed management technical and financial assistance - saves $2.3 million state, $2.9 million other

· Elimination of funding for geologic hazard studies - saves $2.4 million

· Water Resource Management Funding - saves $2.2 million

Ending Fund Balances: For the 2009-11 biennium, the ending fund balance is $408 million General Fund-State and $100 million in the Budget Stabilization Account (BSA), for a total of $508 million. For the current biennium, the ending GF-S balance is $183 million and $432 in the BSA, for a total of $615 million.