Governor signs budget bills, revenue forecast down
Saying she was truly dismayed by $1.8 billion in cuts
to education, Gov. Chris Gregoire signed the
2011-13 operating budget June 15.
The largest reductions were in suspending I-728 and
I-732 and eliminating K-4 class size enhancement for
about $1.4 billion in “savings” to the state.
Another large reduction was $179 million for K-12
salaries – 3 percent for administrators and 1.9 percent
for certificated and classified staff – which shifted
the state budget problem to local school districts,
forcing them to determine whether to pass on the
reduction or make up the difference.
After the March revenue forecast, the Legislature was
faced with a $5.1 billion gap for the 2011-13 biennium.
The signed $31.7 billion biennial budget includes
$4.5 billion in cuts, and one-time transfers and new
revenue from a tax amnesty program.
vetoed many sections that she said were either
unnecessary in this tight budget environment, were tied
to bills that didn’t pass, and were overly proscriptive,
among other issues.
She also signed into law a number of bills necessary
to implement the budget, including signing in full
ESHB 2065, the bill that decreases funding to
alternative learning experience (ALE) programs by 15
WSSDA and proponents of ALE programs had sought a
veto of Section 9 of the bill. The section directs OSPI
to determine how to apply the $41 million in cuts to
ALE, with a minimum of 10 percent and maximum of 20
percent. The governor declined to negatively impact the
state’s ending fund balance.
The governor also signed the 2011-13 capital budget
bills, approving $2.7 billion in construction projects
including full funding for the School Construction
Assistance Program. No vetoes were applied to capital
budget provisions. The
LEAP website will have the best links when posted.
A carefully worked compromise bill,
SSB 5181, also was signed, which will create a blue
ribbon commission to evaluate the state’s use of debt
and make recommendations by the end of the year, as well
as lowering the working debt limit, beginning July 1,
(WSSDA is preparing a special report on this issue,
including podcast interviews with Senate bill sponsors
Linda Evans Parlette, R-Wenatchee, and Derek Kilmer,
D-Gig Harbor, and with House Capital Budget Chair Hans
Dunshee, D-Snohomish. We expect to send the report
June forecast blows hole in fund balance
When the operating budget was signed Wednesday, it
included $738 million of ending fund balance and savings
in the Rainy Day Fund.
Now, one day after, the number on the balance sheet
has plummeted to $163 million.
According to the state’s chief economist, Dr. Arun
Raha, a combination of factors has resulted in fewer
collections than previously expected.
The impact is about $575 million less revenues for
the fiscal year ending this month and what is forecast
for the biennium, including a new $387 million drop in
revenues for 2011-13, and $84 million less for the
biennium ending this year.
Raha’s quarterly revenue forecast presentation
can be found here.
In response to media inquiries, OFM Director Marty
Brown said they hadn’t known the revenue forecast would
be this deep. He also said they hadn’t expected an
up-tick either, which is why the Legislature left as
much as It did in unrestricted reserves and the budget
Economic Revenue Forecast Council Chair Ed Orcutt,
R-Kalama, said the Legislature should have left more in
the two-year spending plan, particularly at the front
end of the biennium.
But Senate Ways & Means ranking member Joe Zarelli,
R-Ridgefield, said he didn’t think it was time to call
an emergency or a special session to address the latest
Both he and Senate Ways & Means Chair Ed Murray,
D-Seattle, said there were two more revenue forecasts
and six months before the Legislature convenes again.
Lawmakers, budget analysts, and Governor’s office
staff will watch expenditures in the meantime, and see
how the first six months of spending in the new budget
“If revenues continue to drop, then we’ll have to cut
again,” said Murray.
The June revenue forecast report is available on