Gov. Gregoire signs responsible budget for tough times

For Immediate Release: May 19, 2009

Cautions public on severe program cuts

OLYMPIA � Gov. Chris Gregoire today signed the 2009�11 biennial budget, enacting a responsible spending plan that addresses a potential $9 billion shortfall for the coming two-year period.

�This was the toughest legislative session in nearly 30 years, and maybe the toughest since the Great Depression,� Gregoire said. �In the weeks, months and years to come, Washingtonians will feel the effects of the hard choices we were required to make � along with nearly every other state � after the mortgage and financial crisis set off this deep recession. Everyone will need to sacrifice.�

The budget signed by the governor includes:

• Savings through administrative reductions and efficiencies in state agencies.




• Reductions in payments provided for hospital reimbursement.




• Savings by making a more than 40 percent reduction to the Basic Health Plan, which provides health coverage to low-income individuals.




• Savings by imposing additional Temporary Assistance to Needy Families caseload management strategies and reducing administrative costs.




• Funding for 3 percent in medical inflation costs for state employee health benefits each of the next two fiscal years, which is less than the projected rate of approximately 7 percent.




• No funding for salary increases for represented or non-represented state and higher education employees.




• No funding for cost-of-living adjustments for K-12 and certain community and technical college staff.




• Reduction in the Initiative 728 per-student allocations to K-12 school districts.




• Savings by modifying state pension contributions.

�These reductions will require everyone to sacrifice,� Gregoire said. �I know that cuts this size will have real effects on the people of our state.�

In addition to the $4.4 billion in reductions over three years, the operating budget uses federal stimulus funds, transfers from the capital budget, part of the rainy day fund and other fund transfers.

�Despite the unprecedented challenges, we kept faith with Washington�s top priority � education,� the governor said. �Along with everything else, K-12 had to be part of the budget solution. But it was cut the least of any state service, which is as it should be. I�m gratified, too, that we maintained our commitment to early learning. There is no greater return-on-investment than early learning services and programs. We also made sure our colleges and universities can continue to prepare our students to succeed in a 21st century economy.�

Gregoire issued a renewed call for community service during these difficult economic times. �Government cannot do it alone,� the governor said. �Friends need to help friends � or the neighbor down the street.�

The governor vetoed a number of portions of the budget, including a provision that would have taken $29 million from the state auditor�s performance audit fund, as well as a provision that would have tied the auditor�s funding to results of performance audits. The auditor has agreed to hold in reserve $15 million in performance audit funds, which will be transferred to the general fund during the next legislative session.

�I believe this represents a fair compromise by ensuring that the auditor can continue his important work to assess the performance of state and local government agencies and assist me in government reform while transferring a portion of his current surplus to the general fund to prevent further reductions,� Gregoire said. �I appreciate Auditor Sonntag�s willingness to work with me to reach this compromise.�

Gregoire also vetoed a $22 million transfer from the Convention Center account to the general fund. The governor was not certain if the approach taken by the Legislature is legally appropriate, and her veto will allow a clean transfer of funds in the 2010 supplemental budget.

The transfer would also eliminate $9 million from tourism spending. �With the 2010 Olympics taking place in Vancouver, British Columbia, we have a unique opportunity to attract tourists to the state of Washington. Tourism spending in Washington directly supports nearly 150,000 jobs for our residents � jobs that are vital to our economic recovery,� Gregoire said.

In addition, because of recent caseload changes, the governor needed to eliminate reductions of $32 million in the Department of Social and Health Services in the current biennium to guarantee funds sufficient to accommodate recent caseload increases and other costs in the Medical Assistance program.

The budget leaves a total of $741 million in savings, with $250 million in the constitutionally protected rainy day fund and $491 million in unobligated revenue.

For more information about the governor�s 2009 legislative session accomplishments, visit: http://governor.wa.gov/news/legresults.asp.

The governor�s operating budget veto message is available at: http://governor.wa.gov/billaction/2009/default.asp.

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