House Dems outline plan to solve $5.1B state budget shortfall

Proposal: Few surprises in House Democrats' plan; Republicans argue $4.4 billion in cuts not deep enough

April 5, 2011 

House Democrats rolled out a budget plan Monday that closes a $5 billion-plus budget gap by slashing funds for public schools, colleges, hospitals and other pieces of the health-care safety net.

The spending plan also eliminates 1,619 more jobs in state government and higher education after July 1, assumes a 3 percent pay cut for most state workers, and ends automatic cost-of-living raises for some state pensioners. It also relies on more than $100 million in new fees, consolidates a few state agencies, and puts operation of the state central liquor warehouse out for private bids of $300 million cash or more.

If there was any surprise, it’s that the bloodletting was less than some advocates for children and health care feared. Even so, majority Democrats said their proposal actually drops the state’s per-capita spending to the levels of 1986, once adjusted for inflation.

“This budget is responsible, thoughtful, and sustainable,” House Ways and Means chairman Ross Hunter, D-Medina, said in prepared remarks about the $32.4 billion two-year spending plan. “Our proposal spends less than the revenue we expect to collect in the next two years. … We are leaving a reasonable ending fund balance just in case those revenues drop again.”

But Republicans said they can do better than the $4.4 billion Democrats claimed to cut or reduce without adding taxes. Rep. Gary Alexander, R-Thurston County, promised to outline deeper cuts as a bill amendment Wednesday in the House Ways and Means Committee.

“The can continues to be kicked down the road,” Alexander, ranking GOP member on the House budget committee, said in a statement. “Programs the state can no longer afford remain on life support, and the footprint of government continues to be larger than our taxpayers and economy can support.”

The plan keeps the state’s Basic Health Program for low-income workers, though it would serve fewer people, and it expands eligibility for state-funded family planning programs. It also retools the Disability Lifeline, which provides health care for people unable to work, but a former cash grant would be converted to a new housing voucher.

The budget spares money for a key early-childhood education program and for programs of local interest including the state history museums in Olympia and Tacoma. Hunter said the proposal also preserves basic education and levy equalization for tax-poor school districts.

GOP CRITICISM

Alexander acknowledged he was able to work with Hunter on elements of the budget. But he said the Democratic plan is “unsustainable and continues the use of various budgeting gimmicks to balance the bottom line.”

Alexander singled out a shift of real estate excise tax receipts from the capital budget.

He pledged to put out a rival budget – which won’t include funds for the Basic Health and Disability Lifeline – as an amendment.

The fees in the budget include about $11 million for services provided by Department of Agriculture programs and a $30 annual Discover Pass. The latter is a pass for parking a vehicle for day use at state parks or other state natural resources areas.

The budget also relies on a one-time $300 million windfall from leasing out the state warehouse that distributes liquor.

The House budget proposal counts on savings from some of the state agency consolidation proposals that have come up in the Legislature so far this session, including creating a Department of Enterprise Services and a Department of Heritage, Arts and Culture.

In so doing, it would preserve funding for the State History Museum in Tacoma along with museums in Olympia and Spokane. All three would have had to close under the governor’s budget proposals.

SEEKING SUSTAINABILITY

Gregoire had kinder words than the GOP for what the House Democrats’ budget team did.

“Many of the proposals the House has put forward are similar, if not identical, to what I proposed in December. The fact is, there just are not a lot of options,” Gregoire said in a prepared statement. “My staff will need more time to review the details, especially surrounding the $300 million assumption for privatizing the state’s liquor distribution center.”

The budget – Proposed Substitute House Bill 1087 – went to a hearing in the Ways and Means Committee Monday afternoon and received instant criticism from college students, lobbyists for the developmentally disabled and others who will be hurt by tuition increases and cuts to hospital reimbursements, home-care services for the elderly who live at home, and other programs.

About 200 teachers from the Washington Education Association were among those at the Capitol as lawmakers unveiled their budget. The teachers said they came to protest an increase in class sizes, and they wanted lawmakers to eliminate state tests as graduation requirements in Washington, a move they said could save $50 million.

Washington Education Association spokesman Rich Wood said he was happy with some provisions, including $25 million in funding for smaller class sizes in high-poverty elementary schools, but it didn’t do as much as teachers had hoped.

In addition to $1.3 billion from K-12 public schools, the budget also shaves nearly a half-billion from the budgets of universities and community colleges. The House plan relies on tuition increases of 11 percent to 13 percent make up some of the higher-education cuts, while adding more than $103 million for State Need Grants to limit its impact on poorer students.

But the budget would suspend funding the state Work Study Program, a deeper cut to the program than the governor had proposed.

Paul Jenny, vice provost of planning and budgeting for the University of Washington, said the House proposal overall represented about 15 percent more in state cuts than the governor’s proposal.

The League of Education Voters said the plan harms educational opportunities and “means more students will struggle to compete in today’s global economy” and layoffs of teachers and aides will occur at public schools.

“But, the impact of more than $500 million in cuts to higher education is even worse. They fall directly on students and families,” LEV chief executive Chris Korsmo added in a statement.

Health care activists had mixed feelings about the cuts. They were pleased that Basic Health is saved – or retained to serve about 44,000 people. BHP and the Disability Lifeline were both spared because both serve as a bridge to national health reform in January 2014.

House Democrats also spared the Apple Health insurance program for about 25,000 children, although the budget makes children ineligible if they cannot document their legal residency.

But human services lobbyist Nick Federici said that despite sparing programs, “the bad news is it’s still pretty awful.” Federici said the House would cut Medicaid programs, reduce home care help for the elderly and disabled, and cuts funds for mental health programs.

Brad Shannon: 360-753-1688 bshannon@theolympian.com www.theolympian.com/politicsblog

Katie Schmidt: 360-786-1826 katie.schmidt@thenewstribune.com

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