Debate begins over how much state should set aside in savings

By Brad Shannon | The Olympian • Published December 19, 2007

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With one eye on the slowing national economy, Gov. Chris Gregoire proposed a supplemental budget Tuesday that would spend $144 million in general revenue on safety-oriented programs but leave $1.2 billion unspent for future state needs.

"Saving money now is vital to ensure that we have money in the future. This is a historically high total of $1.2 billion in savings. It will go a long way to secure the future of Washington's economy," the governor said in a news conference announcing the $29.8 billion general-fund spending plan for 2007-09.

Gregoire said she has no fears for Washington's slowing economy, except that residents might be reacting to weaker economic news on the national front, which prompts fewer house sales locally and a slowdown in the state's revenue. And that means it's time to hold down spending.

"It's not our state that has a souring economy. … But the effect is going to be felt in our state. I've already seen it," Gregoire said.

Top Democratic budget writers said Gregoire offered a good first draft of the budget they will hash out during their 60-day session that starts Jan. 14. But Republicans said it sets the state up for future deficits — a frequent theme the minority party has voiced since Gregoire took office in January 2005.

"I agree with the governor. We have to continue living within our means. There will be pressure from all our members, who have their own issues," said Senate Ways and Means Committee Chairwoman Margarita Prentice, D-Renton, who declined to say how close to Gregoire's $1.2 billion in reserves the Legislature would hit. "We're going to hang on to a lot of it."

Rep. Gary Alexander, whose 20th district takes in flooded areas of Lewis and Thurston counties, said he welcomed Gregoire's responses to the early-December disaster. Gregoire proposed $50 million for the state's share of an Army Corps of Engineers flood- control project along the Chehalis River, and $10 million in housing trust-fund assistance to flood victims.