State workers fear layoffs as Gregoire looks at trims

Cuts to state government, including layoffs, are almost certain as Washington's weakening economy promises to deepen the hole in the budget.

Officially, nothing has been decided. But Gov. Chris Gregoire won re-election with a pledge not to raise taxes, and the budget numbers have been going from bad to worse.

At the top level, the math is clear. To keep doing what it's doing, the state would need $34.5 billion over the next two years. The latest revenue estimate predicted it would have $3.2 billion less than that to spend, just more than a 9 percent gap.

That shortfall has been enough to provoke widespread fears among state employees of layoffs, and not without reason.

"I don't think anything's imminent … because we took the steps we did to make sure we had enough cushion for this biennium," said Glenn Kuper, spokesman for Gregoire's budget office. "Certainly as we build the budget for next biennium, that's a very realistic possibility."

The steps taken so far include a freeze on hiring, cuts to travel and contract budgets, and a 1 percent spending reduction across the board. With the predicted savings, plus the entire rainy-day reserve account, Gregoire figured she had bridged half of the budget gap.

Most recent trims

But on Friday, the state's economic forecast trimmed another $93 million from expectations. Former Gov. Gary Locke has said the budget gap could be as high as $4.5 billion.

A tax revenue forecast is due Nov. 19, which will shed more light on the depths of likely cuts. Gregoire is required to release a debt-free budget proposal before Christmas.

Two months ago, state employee unions negotiated contracts with Gregoire that call for raises in the next budget. The unions also worked to get Gregoire re-elected last week.

"We have confidence that she is the best person to manage this deficit," said Tim Welch, spokesman for the Washington Federation of State Employees. He rejected the notion that layoffs are a given, saying the revenue forecast during the legislative session is most important.

"It's not a time to tax people, and it's not a time to lay people off," he said. "We have to get to the March revenue forecast. We have to know the depth of the problem."

By many accounts, however, the problem is deep enough to demand reductions in government programs — and the workers who run them.

"Cuts are definitely going to be part of the package," said Remy Trupin, executive director of the Washington Budget and Policy Center.

"The governor is going to come out with a proposal that is pretty scary, and it's going to focus people on the size of the problem," he said. "I hope it will push things toward a more systemic mode of thinking. From our perspective, that means looking at revenue."

The think tank supports programs for low- and moderate-income citizens, and those are the services that people need in a recession, Trupin said.

"It's the services to people who don't have a strong voice that are on the table," he said. "It's the feeling that K-12 (schools) should be protected, which is understandable, but when you start cutting services, it's the health and human services."

No-more-taxes pledge

Although Gregoire restated her no-more-taxes pledge after her victory, her fellow Democrats control the state House and Senate. Senate Majority Leader Lisa Brown has notably said ending tax breaks for specific groups or industries is an option.

But the conservative Washington Policy Center says the budget gap is too big to fill by closing a few tax exemptions. Since Gregoire took office, the state budget has increased by one-third, noted Jason Mercier, an analyst with the center.

"We need to go back to where we would have been in 2005 if we hadn't expanded the budget at that rate," he said.

Mercier said even the changes Gregoire has made so far — which included many one-time savings like spending down federal funds — might not stave off more cuts before July, when the next budget starts.

"All indications are that the projection coming out in a couple weeks is going to be even down further. We're going to have really change the direction we were heading in the last budget," he said.

Mercier pointed to the 2003 budget crafted by Gov. Gary Locke and Gregoire's recent rival, former state Sen. Dino Rossi. Facing a smaller budget gap, the plan cut the number of full-time positions paid through the general state fund by 359 over two years to 41,975.

"The only way you mitigate these problems is not overheating your budget when the economy is clicking," he said.

Finding cuts

The Priorities of Government report is expected before the Nov. 19 revenue forecast. The report uses a system for deciding what state programs are most important and shows how far each of them can be funded. Mercier said that report, along with information about the effectiveness of each program, should dictate where the Legislature cuts.

But Trupin, a member of the Priorities of Government panel, said that work does not address basic problems in the way Washington pays for its services. His group argues that the state budget has actually remained flat as a share of the overall economy, and that its ability to bring in taxes has decreased.

He says fear of raising taxes during a recession is exaggerated, and lawmakers should consider it.

"I think people should have a discussion about what the choices are between decimating state government and making choices about what our economic priorities are," he said.

And, despite the gloom hanging over budgets, not all state workers are losing sleep over it.

Washington State Patrol Trooper Ron Somerville was on duty on the Capitol Campus on Sunday, checking doors and responding to calls.

"Am I worried about the budget? No," said the 16-year veteran. "I think we'll be OK."

Adam Wilson covers state workers and politics for The Olympian. He can be reached at 360-753-1688 or awilson@theolympian.com.