Washington governor to discuss budget options with top lawmakers

OLYMPIA — Gov. Chris Gregoire plans to speak Thursday with top legislators as she prepares for either across-the-board spending cuts or a second budget-balancing special session.

The hobbled economy has led to repeated deficit cycles for the state's budget, causing both increased demand for services and lower tax collections. Lawmakers went into a long overtime session this spring to balance a gaping budget hole, but their plan hasn't held up and the state is facing a roughly $310 million shortfall through next June.

State law gives Gregoire, a Democrat, the authority to balance the budget with across-the-board spending cuts in most areas. The governor doesn't necessarily like that approach, calling it a "blunt instrument."

The other option is calling another special session so the Democrat-led Legislature can make more nuanced decisions on spending or taxes. But in remarks Wednesday, Gregoire seemed unsure that lawmakers would be able to finish any budget-balancing work quickly.

She should have a firmer picture after Thursday's planned phone call with the leaders of Democratic and Republican caucuses in the House and Senate.

"My question to them will be, if I call them back into session, can they get it done and can they get it done within 48 to 72 hours?" Gregoire said.

Also complicating matters is that the entire House and about half the Senate are running for re-election this fall — a special session focused on cutting programs or raising taxes would pull legislators off the campaign trail and lead to votes that would upset interest groups.

Gregoire plans to make a decision soon after Congress adjourns for a planned recess Aug. 9, considered the final window before the election for possibly getting $480 milllion in Medicaid matching money from the federal government. She also gets a monthly tax-collections report the next day.

Shortly after that, Gregoire said, she'd be able to tell the Legislature what the shortfall is and what the needed across-the-board cuts would amount to, if she had to make them. It now would be 3.5 percent to 4 percent of agency spending, she said.

Two high-ranking House Democrats recently wrote Gregoire asking that she opt for across-the-board cuts rather than a special session.

The letter, signed by Finance Committee Chairman Ross Hunter, D-Medina, and Ways and Means Committee Chairwoman Kelli Linville, D-Bellingham, said a special session "will take a long time and many people believe it would be difficult to achieve consensus on what to do, leading to a significant potential delay in taking action."

A top Republican budget expert disagrees. Sen. Joe Zarelli, R-Ridgefield, said this week that a special session is the only way to ensure that spending cuts are done in a proportional manner.

Zarelli noted that Gregoire had recently launched a program aimed at remaking Washington's entire budget by focusing on high-priority programs and dropping others.

"It would be ironic if, within weeks after public hearings to examine what are the essential functions of government, she were to choose the crudest instrument possible" and resort to across-the-board cuts, Zarelli wrote.

Also on Wednesday, Gregoire said she wants lawmakers to revise state budget laws when they return for a regular session in January, to give governors more discretion in how to reduce spending between legislative meetings.

"I just think it's a ridiculous tool," she said of across-the-board cuts. "I think a governor ought to have the discretion to set priorities."