WA gov announces $51M in cuts to state welfare

Fewer people will qualify for a state welfare program that provides child care subsidies and help finding a job under cuts announced by Gov. Chris Gregoire on Thursday.

Gregoire also said that across-the-board cuts to other state programs are all but certain in October.

Gregoire said she's told state agencies to prepare for cuts of 4 to 7 percent effective Oct. 1, but said she'll know firmer numbers after the state's updated revenue forecast in September. Based on recent bleak tax collections that show less money going into the state's coffers, she's preparing for the worst.

Heading into January's 105-day legislative session, Gregoire said lawmakers will need to quickly pass a supplemental budget cutting $500 million from the last six months of this year. The 2011-2013 budget will need to cut 10 percent in order to prepare for an expected $3 billion shortfall.

"State government, out of necessity, will need to be smaller," Gregoire said.

Gregoire said even with the influx of more than $540 million in federal dollars coming to the state, the state's reserves have dwindled to $72 million.

On Tuesday, President Barack Obama signed a $26 billion bill that sends money to cash-strapped states, including Washington. Washington will received $338 million in Medicaid match money, and an additional $205 million for education jobs. State officials are still working out how they are allowed to use the education money, but the health care money prevented the state from going into an immediate deficit, Gregoire said

"We were able to dodge a bullet," Gregoire said. "But our budget remains under considerable stress."

Gregoire said she's not implementing across-the-board cuts sooner because she needs to give large agencies time to come up with plans on how they will make the cuts. She could offer no estimates on the number of layoffs that could be a result of the cuts. While Gregoire is limited by the Legislature to across-the-board cuts for state agencies, she has the authority to make more specific cuts in welfare programs.

She said that at least $51 million is being cut from the state's welfare-to-work program because while enrollment continues to rise, matching funds from the federal government have remained flat since the 1990s.

Most of the cuts will come from lowering the income eligibility for the child care subsidy, and fewer extensions will be granted to families who reach the 5-year time limit. Other cuts will be made to employment, education and training services.

"We are talking about some of our poorest citizens," said Department of Social and Health Services director Susan Dreyfus. "This is tough."