Peninsula Daily News and News Sources
If the state Legislature passed Gov. Chris Gregoire’s proposed 2010 supplemental budget as it was presented on Wednesday, it not only would cut health and welfare programs, it also would lead to much larger class sizes and program cuts according to North Olympic Peninsula school superintendents.
But the governor’s proposal this week was only her first volley, which makes her case for tax increases she plans to present in a second proposal in January, when state lawmakers start balancing the books.
On Wednesday, Gregoire presented a bleak plan to balance the biennial budget by wiping out spending for health care, welfare and education programs.
As required by state law, her proposal used only the state’s exisiting tax streams to balance the state’s $2.6 billion budget deficit.
Programs cut in her first proposal, and likely to be restored in her second budget, included:
• The Basic Health Plan, which provides subsidized health coverage to about 65,000 low income Washingtonians.
• General Assistance, a state welfare program for disabled people who can’t work or qualify for federal disability payments.
• Levy equalization, a system that gives money to school districts with a lower-than-average base of property taxes.
While Gregoire did not propose a specific way to finance the $700 million she hoped to save from cuts, she didn’t rule out an increase to the state’s 6.5 percent sales tax.
“These important and integral services do not come free,” Gregoire said. “No one likes to pay more taxes. And no one likes to raise more taxes, no matter the state of the economy.”
Among the cuts she proposed Wednesday are more reductions to the Initiative 728 — referred to as the I-728 fund which pays for special programs and reduced class size — as well as the kindergarten through fourth grade enhancement.
‘Hit us hardest’
“Both of those hit us the hardest because they both reduce our class sizes,” said Tom Opstad, Port Townsend superintendent.
He — and other superintendents — said there had not been enough time to properly analyze the proposal.
“The other part of all of this, that doesn’t really come through initially, is that there are some unknown costs,” Opstad said.
“The state is talking about raising rates in some areas, such as districts having to pick up an increase in retirement contributions.
“All that comes from the local districts, and it is not well defined and is somewhat hidden in the budgeting process, but we’ll know more with the final budget.”
Equalization funds
Diana Reaume, Quillayute Valley School District superintendent, said that for her smaller district, the proposed slashes to the levy equalization funds was the largest impact.
“We did know that was coming,” she said. “But the question still remains, how deep will this go?
She said Wednesday that the district hadn’t yet assessed the effect if levy equalization funds to the district were eliminated.
“What we’ll do is we will start working now at what the worst-case scenario is,” she said. “Then we will have to see what the senate and the representative budgets are.”
Reaume said that the district had been diligent to preserve reserves and that those funds would help carry them through.
“The other factor here is that there could be some cuts which would take place immediately,” she said.
That would further impact the current budget — not just next year’s budget.
Port Angeles
Port Angeles Superintendent Jane Pryne said the district — the largest on the North Olympic Peninsula — also would begin preparing a worst-case scenario budget.
“It is unfortunate when the budget crisis impacts our students’ education,” she said.
“Our district budget has been hit hard over recent years due to declining enrollment and continued state and national funding cuts.
“We will continue to focus on our mission to continue to create and sustain learning communities that prepare each student to live, work, and learn successfully in a changing world.”
Gregoire suggested the possibility of lifting the levy lid, allowing districts to receive up to 36 percent of their budgets from local funds — as opposed to the current 24 percent limit.
Reaume said she wasn’t sure how much a levy lid increase would help.
“For us that really isn’t an option,” Reaume said.
“You can only get so much locally. You can’t squeeze blood out of a turnip.”
Gregoire’s decision to seek tax increases was not a surprise. Gregoire spoke repeatedly in recent weeks about her unwillingness to run with an all-cuts budget. But the move carries some political risks for the Legislature’s Democratic majority going into an election year.
Raising taxes would require changes to Initiative 960, the voter-approved tax-limiting measure passed in 2007.
That initiative effectively kept a lid on any tax plans during the last legislative session, but a two-year ban on amending its terms expires this month.
Republican lawmakers, however, said Democrats were reaching for revenue too quickly. They suggested alternatives that also would save or raise money, including reductions of state management staff and privatization of the state monopoly on liquor sales.
“In essence, the governor is saying that state government won’t live within its means even though the economy is forcing families and businesses to live within their much-reduced means,” said Rep. Ed Orcutt, R-Kalama.
Gregoire also announced Wednesday that she was closing all or part of several state institutions to save at least $70 million.
Ahtanum View, Larch and Pine Lodge prisons will be closed, as will one wing at the state penitentiary in Walla Walla. Parts of the juvenile institutions at Naselle Youth Camp, Maple Lane School and Green Hill School also will be closed.
Also shuttered would be two facilities for the developmentally disabled: the Frances Haddon Morgan Center in Bremerton and Rainier School in Buckley.
“The actions combined will result in millions in savings for state government now, and even more in the future,” Gregoire said.
