Economic downturn, snowstorm top 2008 stories

The gathering economic storm that promises massive budget cuts and other financial pain was voted the top Washington story of 2008 by the state's newspaper editors.

Running a close second was a real storm story: The December snow that virtually shut down greater Puget Sound and buried Spokane in record snowfall.

Rounding out the top five were the collapse of Seattle-based Washington Mutual, the biggest bank failure in U.S. history; the departure of the NBA's SuperSonics to Oklahoma City; and the re-election of Democratic Gov. Chris Gregoire after a bruising campaign rematch with Republican Dino Rossi.

The first order of business for Gregoire's second term will be dealing with the fallout of the economic meltdown: A revenue shortfall that has ballooned to an estimated $5.7 billion for the next two-year budget cycle.

The slumping economy means a drastic reduction in the amount of money flowing into the state's coffers, a shortage that has already prompted Gregoire to make emergency spending cuts. Her proposed budget for the next two years is drawing howls of protest from education and social-service advocates, as well as lawsuits from state employees who stand to lose negotiated pay raises.

Post-Christmas rain swiftly melted the snowfall that all but paralyzed the Seattle area, but the story promises to endure. Critics attacked Mayor Gregg Nickels over the Seattle's inability to clear many of its streets, and mocked Metro, the King County transit agency, for its meager service and the many buses left stranded around the city. In Eastern Washington, meanwhile, Spokane was still blanketed in heavy snow as the New Year approached.

The collapse of Washington Mutual, which was drowning in bad mortgage debt when it was seized by federal regulators and sold to JPMorgan Chase in September, will also resonate for months or years to come.

Massive layoffs are under way at the thrift's downtown Seattle office towers, and the company's high profile in civic and cultural affairs will certainly change along with the names on dozens of branches around the state. Meanwhile, various investigations continue into the company's fast-and-loose lending policies during the housing boom, practices that experts say are partly to blame for the spectacular collapse of the housing market.

Basketball fans cursed when Oklahoma City tycoon Clay Bennett abandoned an effort to procure taxpayer money for a new arena and moved Seattle's oldest professional sports team to his hometown. Bennett was named Oklahoman of the Year by a local magazine.

The move also made a villain out of Starbucks Corp. Chairman Howard Schultz, who had sold the Sonics to Bennett, and intensified criticism that state and local officials hadn't done enough to keep the team. Some fans took dark pleasure in the abysmal start of the 2008 season for the team now known as the Oklahoma Thunder.

In the political arena, the rematch between Gregoire and Rossi for the governor's mansion was among the most anticipated and closely watched races in the country as Republicans hoped Rossi could avenge his historically narrow loss in 2004.

Mud flew early and often, and money poured in for both candidates from around the state and across the nation. Rossi's biggest backer, the Building Industry Association of Washington, turned into something of a liability late in the campaign as he was forced to give an embarrassing sworn deposition about his ties to the group that had spent millions on independent campaign ads supporting him.

In the end, Gregoire rode a Democratic tide to a relatively easy victory as voters in Seattle turned out in droves to deliver Washington for Democrat Barack Obama in the presidential race. Gregoire won more than 64 percent of the vote in King County, compared to less than 58 percent in 2004.

Rounding out the top 10 stories of the year were the Machinists strike that shut down Boeing commercial airplane production, the opening of the third runway at Seattle-Tacoma International Airport, the U.S. Border Patrol's policy of setting up immigration roadblocks far from the Canadian border, a deadly shooting rampage in Skagit County, and a dispute over holiday decorations at the state capitol.

The eight-week strike forced Boeing to close its aircraft factories in the Seattle area, cost the company an estimated $100 million per day in deferred revenue and further delayed the rollout of the new 787 jetliner.

The runway opened after years of delays and legal battles mounted by environmentalists and nearby communities. It cost more than $1 billion to build, more than five times the original estimate. Within days after it opened, local residents were complaining that the airport was using it more often than officials had promised.

The Border Patrol roadblocks on the Olympic Peninsula and elsewhere drew sharp criticism from civil-rights activists and some local officials who accused the agency of using homeland security as an excuse to find and detain immigrants. Border Patrol officials defended the practice as an essential guard against terrorists infiltrating the country.

In September, a shooting spree shattered the quiet of a small Skagit Valley community. Isaac Zamora, who had a history of serious mental illness, is accused of killing a sheriff's deputy and five other people, including a motorist who was shot as Zamora allegedly fled on Interstate 5.

Controversy over the holiday display at the capitol erupted after a placard sponsored by the Wisconsin-based Freedom From Religion Foundation was installed for the first time this year near a Nativity scene and a Christmas tree. The placard, which read in part that "religion is but myth and superstition that hardens hearts and enslaves minds," became a hot topic on national cable-news shows.