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Lightly used services save state millions

BY BRAD SHANNON | THE OLYMPIAN • Published March 13, 2007

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Governor's plans

Gregoire did not tip her hand on what she wants done with the money, although she did tell reporters during her weekly media meeting that budget writers would get $200 million in good news resulting from the case­loads.

That's roughly the amount Gregoire has proposed in new spending for a major push on math and science teaching, and a little less than she's proposed to put into a new, hard-to-tap Rainy Day Fund.

Gregoire's budget director, Victor Moore, declined to say how the governor might want to spend it - or use it in her more than $30 billion spending proposal for 2007-09.

"It creates new conversations between the governor and the Legislature," Moore said delicately.

Moore said the savings will be "a little over $200 million" - even after accounting for more than $30 million in additional pay raises that the state will have to give to teachers.

Much of the savings is from lower than predicted use of the Medicaid program and lower prescription drug utilization, Moore said. Some is the result of residents moving onto the federal Medicare Part D program, he said.

The extra salary cost for teachers is the result of Initiative 732, adopted by voters in 2000. That initiative guaranteed yearly cost-of-living increases for K-12 school employees and tied them to the Seattle Consumer Price Index.

Teachers had expected to receive pay raises of 3.4 percent this year and 2.6 percent next year under inflation-connected formulas set by Initiative 732. The raises now will be 3.7 percent this year and 2.8 percent the following year, said Anne Martens, spokeswoman for the governor's Office of Financial Management.

By contrast, state employees negotiated contracts with Gregoire that will raise pay in most cases by 3.2 percent this year and 2.0 percent next year.