Gov. Gregoire urges Legislature to develop long-term budget solutions, avoid one-time fixes

For Immediate Release: March 17, 2011

OLYMPIA � Following today�s revenue forecast, Gov. Chris Gregoire urged state legislators to avoid one-time fixes and move forward with long-term budget solutions that are sustainable in the future.

�We can�t rely on short-term solutions,� Gregoire said. �Short-term solutions may cause less pain now, but we need a budget that is both sustainable and long-term.�

Gregoire discussed one-time solutions agreed to in past economic downturns that negatively impacted future budgets, including:

� The decision in 1971 to create a 25th month in the two-year budget. It gave budget writers an extra month�s worth of tax collections to fix the shortfall, but left the next budget just 23 months of unspent revenue. It took 16 years to buy back that quick-fix loan; and

� The decision in 2002 to borrow $450 million through securitization of tobacco settlement payments. The action will ultimately cost the state $1 billion in principal and interest, and has resulted in the state receiving $100 million less per biennium in tobacco settlement funds.

�Have no doubt � writing a budget that relies on no new taxes, low revenue and high demand for services is a tough challenge,� Gregoire said. �But it must get done. This must be a year of decision, not deferral. These fixes may look good now, but they won�t a few years from now. We�ve got to stand for our children�s economic future as well as our own. That requires sacrifice on our part.�

Gregoire continued to urge the Legislature to move forward with her proposals to streamline government, enact new efficiencies and consolidate agencies, which would achieve more than $1 billion in savings in the next biennium. The governor also pushed lawmakers to take action on her proposal to reform our state�s pension system, saving more than $2 billion over the next four years, along with her plan to address our workers compensation system, saving another $560 million through 2015.

�The Legislature has shown an unprecedented degree of collaboration in working to solve our problems,� Gregoire said. �My administration is ready to help as both parties and both chambers move Washington forward.�