Cool economy prompts Gov. Christine Gregoire to order state hiring freeze

OLYMPIA — In her most significant action so far to confront a growing economic downturn, Gov. Christine Gregoire ordered a state hiring freeze and spending cuts aimed at trimming $90 million from the current budget.

Gregoire sent a memo to state agency directors on Monday. In it, she maintained that Washington's economy is still healthy, but "a weakening national economy has affected us. The skyrocketing costs for groceries and the high price of fuel are being felt by all Washingtonians."

She asked state agencies to freeze nonemergency hiring, out-of-state travel, discretionary purchases of new equipment and personal-services contracts. Gregoire said she's asked higher-education and other elected offices, which she does not control, to do the same.

In addition, Gregoire asked agencies to reduce their gasoline consumption by 5 percent compared to last year.

This is the first time Gregoire has ordered a hiring freeze since she was elected governor in 2004.

In early 2002, when the state was facing a $1.6 billion shortfall, then-Gov. Gary Locke ordered state agencies to immediately freeze hiring and equipment purchases and to limit travel.

At the time, Locke also warned he was contemplating canceling scheduled cost-of-living raises for state workers and across-the-board cuts to all agencies under his control.

The state Senate Ways and Means Committee has projected that Gregoire and the state Legislature will have to deal with a $2.7 billion budget deficit when they put together the next two-year budget in 2009.

Gregoire has maintained in recent months that it's too early to tell if there will be a deficit next year and that there's still time for the economy to turn around. The governor's office said Gregoire's position hasn't changed as far as the projected deficit.

"This was in response to the June revenue receipts, which were down $60 million. We believe it's an adequate response to that slowdown," said Pearse Edwards, a spokesman for Gregoire.

Gregoire already is working with state agencies to prioritize programs and look for possible budget cuts, and she has said any tax increases will be a last resort to balance the budget.

Her requested hiring freeze applies to both vacancies and unfilled new positions, her staff said. If implemented across government, the hiring freeze would trim about 930 jobs in general government, and about 1,000 at the state's colleges and universities.

Public-safety and some health positions are exempt from the freeze, such as state troopers, prison guards and mental-hospital staffers, said Glenn Kuper, an Office of Financial Management spokesman.

Republicans, who've criticized Gregoire for increasing state spending by $8 billion since she was elected, quickly took note of the move.

"I'm glad that Governor Gregoire has started to recognize the budget crisis she's created," Dino Rossi, the Republican candidate for governor, said in a prepared statement. "Unfortunately, her announcement today does not go far enough."

Rossi said Gregoire should take other steps, such as suspending salary negotiations with state-employee groups over pay increases, until the state has a better handle on the projected shortfall for next year.

The Associated Press and Seattle Times reporter Ralph Thomas contributed to this story.

Andrew Garber: 360-236-8268 or agarber@seattletimes.com