Those were just a sample of the cuts Gregoire laid out in her press conference that ended just moments ago. In presenting her budget she said, "Let me be very clear: I do not support this budget. As required by law, it is balanced. For me, it is unjust.”
This budget is called "Book I" by insiders, as it is considered the first budget, required to be balanced with no new revenue.
Here's a breakdown of how Gregoire proposes to bridge the $2.6 billion shortfall without new revenue.
Use of $904 million from "other" revenue - This includes $229 million from the Budget Stabilization Account (Rainy Day Fund), $110 million from the Savings Incentive/Education Savings Accounts (funds agencies didn’t spend in the previous year), $52 million from PEBB Reserve (state health benefits) and lowering the Ending Fund Balance to $310.5 million.
$1.7 billion in program cuts:
K-12 - $375 million including the elimination of levy equalization funding, all-day kindergarten, I-728 (classroom size initiative) and K-4 staffing enhancements.
Higher Education - $370 million including reducing the State Need Grant, across-the-board reductions, and suspending the Work Study program and eliminating other smaller financial aid programs.
Other Education - $13.8 million including eliminating ECEAP (early learning) for 3- year-olds, eliminating the Career and Wage Ladder, and reducing funding for the Arts Commission.
Health and Human Services - $850 million including eliminating the Basic Health Plan and the General Assistance program, suspending Maternity Support Services, and reducing Apple Health Eligibility to less than 205% of Federal Poverty.
Natural Resources - $25 million including eliminating funding for watershed planning, reducing funding for water resource activities, and reducing Fair Funding.
General Government - $41 million including reductions in growth management grants, state library services, and the Crime Victims Benefits program.
FTEs: Decrease state employees by an additional 1,500 FTEs. From Fiscal Year 2009 (last year of the prior biennium) through Fiscal Year 2011 (second year of this biennium), it is anticipated that state FTEs will decrease by 4,500.
Mandatory Spending: This budget spends an additional $760 million for caseload increases and other mandatory costs like forest fires, increased utilization of medical services, etc.
Additional Spending: There is about $86.5 million in additional spending in the budget that is not related to mandatory increases. It includes restoring $12 million for Juvenile Rehabilitation, $11.5 million for worker retraining in the community/technical colleges, and $50.7 million for state employee health insurance to address a shortfall in the PEBB funds.
The Governor stated she will introduce another budget in January in which she will "buy back" or restore some of these cuts using increased revenue. This will be her "Book II" budget.
She did not announce which revenue sources she will endorse but expressed that she is very conscious of not wanting any new revenue source to interfere with or slow down our state's economic recovery. When asked for an example of such a source, she cited an increase in the B&O tax.
Gregoire's list of buybacks would cost about $700 million. Her list includes:
- Basic Health Plan
- Apple Health for children
- A scaled-back version of General Assistance (6 month eligibility with $250/month grants)
- Levy equalization
- State Need Grant (financial aid for college)
- ECEAP slots and all-day kindergarten
- Adult medical, dental, vision and hospice programs
- Developmental disability and long-term care services
- Local Government Finance: She would like to give local governments more flexibility in how they use their revenues.
- Levies: She suggests allowing school districts to raise their levy lids up to 36 percent.
- Hospitals: She endorses the proposal from the Washington Hospital Association to set up a hospital assessment fee, which allows the state to capture additional federal funding.
- Juvenile Rehabilitation: None will be closed, however there will be downsizing at Maple Lane, Green Hill and Naselle, with additional community placements instead.
- Corrections: Several institutions will close – Pine Lodge, Larch and Ahtanum; McNeil will be converted to minimum security; and the stacks at the Walla Walla penitentiary will be closed and rebuilt. Additional beds will be opened at the new prison at Connell, where costs are lower.
- Developmental Disabilities: Frances Haddon Morgan Center would close in 2011 and Rainier School in 2014.
You can read the Governor's press release and related budget materials here.
