Budget deficit looms largest

OLYMPIA — Top Republican and Democratic lawmakers agree: The looming state budget deficit will dominate the upcoming legislative session, and the hole could get bigger.

Gov. Christine Gregoire has proposed a cut-heavy budget that also counts on about $1 billion in federal assistance. But some lawmakers aren't thrilled with that calculation.

"We can't balance the budget on hope," said Senate Majority Leader Lisa Brown, D-Spokane. "We need to see dollars."

Lawmakers convene Tuesday for a 105-day session. They'll be grappling with major spending cuts as the state tries to solve a projected budget deficit of about $5.7 billion.

Senate Republican budget chief Joe Zarelli, of Ridgefield, said he expects the deficit to climb as high as $7 billion after the next revenue forecast in March.

"The sooner we realize where we're at, we can start moving forward," he said at a meeting with reporters Tuesday in Olympia to discuss the upcoming session.

The Associated Press sponsors the annual pre-session forum for reporters and editors in Washington state.

Plan calls for big cuts

Last month, Gregoire stuck to her campaign pledge and unveiled a no-new-taxes budget that would severely cut spending, suspend voter initiatives, transfer and borrow some money, and rely on a federal bailout.

Under Gregoire's plan, spending cuts totaling more than $3 billion during the next 2 ½ years would be felt across state government, including K-12 and higher education, social services, prisons, health programs, state parks and pay raises.

"Some of the cuts in the governor's budget I think we feel are not wise, given their impact on families," Brown said.

But she said majority Democrats are reviewing the proposed cuts before thinking about alternative solutions, such as taxes.

Brown said that while more taxes can't be ruled out, "it's not where we start."

"It's not just a question of a tax or a cut, they can both be very damaging," she said.

House Speaker Frank Chopp, D-Seattle, agreed, saying that it was important to look at the budget not only as a financial document, "but a moral document as well."

Choices may fall to voters

Sending proposed taxes to the public for approval may be the only option available for raising new money. Voter initiatives that raise taxes require a two-thirds vote in both chambers of the Legislature, but that hurdle is removed if lawmakers put taxes on the ballot. That also applies to shrinking any tax exemptions.

House Minority Leader Richard DeBolt, R-Chehalis, said he's worried that "we're going to take the hardest cuts and send them to the voters as taxes."

"We're going to go ahead and cut education and say to the voters, 'Here, we've got to get new taxes to pay for these programs,' " he said. "That's not the kind of solutions we want to look at. We want to look at the budget as a whole."

Marty Brown, Gregoire's legislative director, said the deficit's size will erase some turf battles that might otherwise occur in the budget negotiations.

In years past, he said, the governor's staff vigorously defended the governor's budget proposal during legislative hearings. But this year, the executive branch will be much more open to changes by the Legislature, he said.

"If somebody's got a better idea, we're open to it. If a priority that we did not fund is deemed a higher priority than something else, then we're open to that discussion," he said.

Associated Press reporter Curt Woodward contributed to this report from Olympia.

Union sues Gregoire over promised raises

OLYMPIA — A third union is suing Gov. Christine Gregoire because her proposed budget doesn't include money to pay for a new labor contract.

The Service Employees International Union (SEIU) Local 925 is the latest to sue Gregoire over unfunded contracts. SEIU 925 represents about 10,000 state-subsidized child-care providers.

It filed the lawsuit on Tuesday in the state Supreme Court.

Unions for state employees and state-paid home-health-care aides also have sued Gregoire recently over the issue.

Gregoire has said the state simply can't afford to give pay raises to home-care workers, teachers and other state-paid workers while facing a deficit of about $5.7 billion through the 2011 budget year.

The Associated Press