Gregoire to propose deep spending cuts
OLYMPIA, Wash. (AP) - Gov. Chris Gregoire plans to propose heavy spending cuts in her latest plan for patching the state's budget deficit, with everything from college grants to health care for the poor in line for major reductions.
Gregoire also plans to ask for tax increases early next year to avoid making the deepest cuts. The proposals to be announced Wednesday are a tune-up of the state's two-year budget, which went into effect this July and lasts through mid-2011.
When approved this spring, the budget balanced a roughly $9 billion gap between spending and expected tax collections. Since then, the slow economy and higher costs have created an additional deficit of about $2.6 billion.
By law, the governor is required to propose a balanced budget that uses only the state's existing revenue streams. The shortfall can be solved from a relatively small $7.7 billion slice of the roughly $31.5 billion budget, according to the Senate Ways and Means Committee.
So how will Gregoire get there? A few big-ticket items probably on the chopping block include the Basic Health Plan, which provides health insurance for the working poor; a welfare program called General Assistance-Unemployable; state financial aid grants for college students; and state payments to colleges and universities.
Majority Democrats are unlikely to let all those cuts slide. That's why business leaders are already being sought for their opinions on the prospect of tax hikes as the Legislature prepares for a busy election year.
Steve Mullin, president of the Washington Roundtable, noted that businesses already are being hit by increases in unemployment insurance and workers' compensation rates.
"We're starting the session out having swallowed two significant increases in business costs," Mullin said. "It would be great if the Legislature could take some efforts to offset that."
But others point out that there are people behind the numbers in state budget cuts.
The Washington State Hospital Association is working on a plan for hospitals to be levied a new fee, which they would pay out of reserves. That would draw federal matching money, which could be sent back to the hospitals while allowing the state to cut Medicaid spending.
"It shores up health services for the lowest income people," hospitals spokeswoman Cassie Sauer said. "Those folks are at risk of losing hospital-based services right now, because hospitals are considering cutting the services that they need."
Gregoire also plans to ask for tax increases early next year to avoid making the deepest cuts. The proposals to be announced Wednesday are a tune-up of the state's two-year budget, which went into effect this July and lasts through mid-2011.
When approved this spring, the budget balanced a roughly $9 billion gap between spending and expected tax collections. Since then, the slow economy and higher costs have created an additional deficit of about $2.6 billion.
By law, the governor is required to propose a balanced budget that uses only the state's existing revenue streams. The shortfall can be solved from a relatively small $7.7 billion slice of the roughly $31.5 billion budget, according to the Senate Ways and Means Committee.
So how will Gregoire get there? A few big-ticket items probably on the chopping block include the Basic Health Plan, which provides health insurance for the working poor; a welfare program called General Assistance-Unemployable; state financial aid grants for college students; and state payments to colleges and universities.
Majority Democrats are unlikely to let all those cuts slide. That's why business leaders are already being sought for their opinions on the prospect of tax hikes as the Legislature prepares for a busy election year.
Steve Mullin, president of the Washington Roundtable, noted that businesses already are being hit by increases in unemployment insurance and workers' compensation rates.
"We're starting the session out having swallowed two significant increases in business costs," Mullin said. "It would be great if the Legislature could take some efforts to offset that."
But others point out that there are people behind the numbers in state budget cuts.
The Washington State Hospital Association is working on a plan for hospitals to be levied a new fee, which they would pay out of reserves. That would draw federal matching money, which could be sent back to the hospitals while allowing the state to cut Medicaid spending.
"It shores up health services for the lowest income people," hospitals spokeswoman Cassie Sauer said. "Those folks are at risk of losing hospital-based services right now, because hospitals are considering cutting the services that they need."