State spending on track to rise, despite budget cuts

OLYMPIA — There was a lot of talk two months ago about making deep cuts in spending and reducing the size of state government to help close a $2.8 billion budget shortfall.

"We understand families are making very difficult decisions around the table," state Sen. Rodney Tom, D-Bellevue, said in early January. "We're going to make those same very difficult decisions."

Yet as the legislative session nears an end, spending is on track to increase. Lawmakers are planning cuts but have apparently set aside efforts to streamline state government that many feel could ease future budget problems.

House Ways and Means Chairwoman Kelli Linville, D-Bellingham, noted she'd called for steps such as privatizing state liquor stores, but to no avail. "I came in saying a lot of things that at this point I have not been able to deliver on," she said.

"You come in saying there's going to be blah, blah, blah. And you end up with what you can get 50 votes for," she said. "That's the truth."

The potential uptick in spending, in the House and Senate proposals, takes into account more than $500 million in expected federal aid, as well as tax increases.

Proposals include an increase in the sales tax, new taxes on bottled water, a higher cigarette tax, and ending certain tax exemptions.

That's not to say lawmakers aren't proposing cuts, often in places they've looked before.

The budget plans, for example, would cut $78 million from the class-size-reduction initiative, I-728, and millions more from social services and higher education. Total cuts currently range from about $650 million in the House budget to more than $900 million in the governor's.

However, the cuts are offset by around $900 million, or more, in increased spending in the budget proposals. Most of the money would go to pay for rising expenses to maintain current services, such as more people qualifying for Medicaid and additional K-12 students.

But there's also new spending, including millions for worker-retraining programs at two-year colleges and increased funds to aid "property-poor" school districts.

After the federal money and everything else is taken into account, the current $30.9 billion two-year general-fund budget — which includes some cuts approved earlier this session — would increase more than $200 million under the House and Senate proposals, according to the governor's budget office.

Gov. Chris Gregoire's plan, which cuts more than the other budget proposals, would keep overall spending essentially flat.

Not everyone feels the Legislature went too easy on spending cuts.

"Look at the programs we've cut, whether it's Basic Health Plan, higher education, what we've done to schools," said Sen. Ed Murray, D-Seattle, Senate Democratic caucus chairman.

"I see cuts throughout," he said, noting the billions in cuts made last year.

And Murray said he's not convinced some of the government-reform proposals, such as privatizing liquor stores, would save any money. "Some of that can be budget theater versus reality," he said.

Other budget negotiators say the Legislature did not go far enough.

"My concern is that ... even though we have made some difficult choices, in the big picture we haven't made the structural changes we need," said Tom, who voted against the Senate's proposal.

House Majority Leader Lynn Kessler, D-Hoquiam, said lawmakers in her caucus who wanted more cuts in state spending "sort of got run over" by members from districts considered safe havens for Democrats.

"I think a majority of our caucus is from very safe districts where voters are very different from swing [districts] and rural areas," she said. "As a result, they just feel like we don't want to reform. ... They have far more numbers and they are much more set on not doing the kinds of reforms we need to do."

Tom said he is especially troubled by proposals to spend millions to maintain health benefits for state workers instead of asking them to bear more of the cost.

"We're going to be dumping more money into that to maintain a level of service, and then we're cutting BHP [Basic Health Plan] and we're cutting nursing homes. I think that sends a mixed message of where our priorities are," he said.

Not only that, but one-time fixes such as the use of reserves and federal money set the state up "for a complete disaster next year," he said.

Senate Minority Leader Mike Hewitt, R-Walla Walla, said that with the federal money coming in, Democrats "don't have the incentive to fix the budget. It's easy to take the money and move on and hope for a better day," he said. "This is like running out and buying an expensive automobile and then going out and finding a job to pay for it. It's crazy."

The current two-year budget, which runs through June 2011, is projected to spend more than $3.5 billion in one-time federal aid when money awarded last year is also factored in.

Unless the economy improves faster than expected, or Congress approves another bailout for the states, Washington state will be more than $2 billion in the hole when lawmakers come back next year to write another two-year budget.

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