Ax and tax: a budget-balancing exercise
Last year, we asked you to try your hand at solving the state's worst budget shortfall in decades. Guess what? The problem is bigger now. Tax collections will likely fall more than $2.65 billion short of what the state needs to keep government going at its current pace for the next two years. Legislators are struggling to close the deficit. Think their job is easy? Step into their shoes and find $2.65 billion in spending cuts, tax increases and other new money from the lists below. Better yet, try this exercise with a big group of people. Remember, you have to get a majority of them to go along with every cut and every tax. NEW How readers balanced the budget		State budget gap Money is not expected to come into state coffers as fast as it's going out during the next two-year budget cycle. * Includes $24.57 billion in general-fund spending and $560 million in spending in the Health Services Account.

How big is your budget deficit?
First there are a few important decisions you have to make — decisions that could leave you with an even bigger budget problem:

		COLUMN ONE
Pay raises for state workers? State employees are hoping for the same 2 percent cost-of-living raises that teachers are due to get over the next two years (we'll get to that later). But covering those raises would cost another $234 million.		$234 M
How about for home-care workers? The state's recently unionized 26,000 home health-care workers, who now make $7.68 an hour, are seeking a $2.07-an-hour raise over the next two years. They also are trying to get health benefits for the first time. Total price tag: $98 million.		$98 M
Keeping up on college Want to add enough enrollment slots at the state's colleges and universities to keep up with the baby-boom echo? Add another $144 million.		$144 M
Your starting deficit This is now the amount you have to make up in spending cuts or tax hikes.		DEFICIT TOTAL
Spending cuts OK, now let's look at some possible spending cuts, including many of the proposals now simmering in Olympia. State government has hundreds of programs, so this list is far from complete. But it should give you a sense of how deep you will have to cut. So, put on your apron and grab your cleaver:
		COLUMN TWO
Honey, have you seen the meat ax? Want to close the deficit with one swing? To get the job done, you would have to lop off a vast swath of state government. For instance, try eliminating all of these: University of Washington; Western Washington University; Basic Health Plan; State Patrol; Department of Ecology; Veterans Affairs; Natural Resources; Agriculture; State Parks and Recreation Commission; State School for the Blind; Human Rights Commission; Children's (Child Protection) Administration; Juvenile Rehabilitation; Alcohol and Substance Abuse; State Supreme Court; State Senate and House of Representatives. Go ahead, try it. Savings: $2.5 billion.		$2.5 B
Bureaucracy buzz cut One of the simplest ways to trim spending is with across-the-board cuts to state government. Savings: $123 million for every 1 percent cut to all state agencies, colleges and universities (but excluding K-12 education). It would take more than a 20 percent across-the-board cut to close the entire deficit. All things created equal? This approach means you have cut state troopers just as deeply as, say, outdoor recreation. And overall, human service programs would have to bear more than two-thirds of any across-the-board cut.		$123 M x  % =
(Very) Basic Health Plan? Unlike other states, Washington provides subsidized health insurance to about 125,000 low-income people who do not qualify for other medical assistance. Savings: Lots of options here — $500 million if you eliminate the program altogether; $293 million if you cut off coverage for all childless adults - about 60,000 people; or $100 million if you simply reduce the state subsidy by 20 percent and force recipients to pay a bigger share. Un-cover the working poor: If cutbacks to the Basic Health Plan leave people uninsured, who pays for their care?		$500 M $293 M $100 M $0
Tap those teacher raises Voters in 2000 approved Initiative 732, promising teachers and other school employees annual cost-of-living raises. Savings: $500 million if you overturn, or at least suspend, the pay-raise initiative. Or you could ask voters to approve a tax increase to cover the raises. Pick one when you get to the taxing part of the game.		$500 M
Taking (away) the Initiative Aside from teacher raises, voters in recent years overwhelmingly approved two other big-spending measures. I-728 steers more money toward class-size reduction efforts. I-773 increases tobacco taxes to pay for more state-subsidized health care. Savings: $221 million if you suspend the class-size measure. $305 million if you roll the extra tobacco-tax money into the general fund. Easier said than done: It's been less than two years since I-773 passed, so any changes require a two-thirds vote of the Legislature		$221 M $305 M
Clip state employee pay and benefits About one-fifth of all state spending goes toward salaries and benefits for more than 100,000 state government and higher-education employees. Savings: $200 million if you impose a 5 percent across-the-board pay cut. Save another $110 million by forcing state workers to pay 20 percent (they now pay 14 percent) of their health-care costs. Earnings erosion: State workers got no cost-of-living raises in five of the last 10 years and in recent years have been forced to pay more for health care.		$200 M $110 M
Cut off "optional" coverage for the poor Though not required under Medicaid, the state provides non-emergency dental, vision and hearing coverage for low-income adults. Savings: $52 million.		$52 M
Save through shorter sentences Keeping criminals locked up is expensive. Grant early release to about 1,200 low-risk offenders, eliminate post-prison supervision for thousands more, and reduce drug sentences. Savings: $95 million.		$95 M
Close foreign trade offices The state has international trade representatives based in Paris, Tokyo, Seoul, Shanghai and Taipei. Savings: $2 million Mon dieu! Who's going to keep an eye on Airbus?		$2 M
Another hit for higher ed? Higher education is one of the state's biggest expenses. The governor has proposed an across-the-board cut averaging nearly 7 percent to all four-year colleges and universities as well as community and technical colleges. Savings: $122 million		$122 M
Capping tort claims In recent years, the state has been forced to pay huge sums in damage claims. Some legislators want to limit state-government liability payouts to $1 million to $2 million. Savings: $40 million No-man's land: You might be wading into a crossfire between trial lawyers and big business.		$40 M
Less food for the soul? The state spends money each year to boost arts participation and the amount of art in public places. Savings: $5.7 million if you eliminate the Washington State Arts Commission Maria Callas: "I don't need the money, dear. I work for art."		$5.7 M
How many kids can we afford? Under Medicaid, Washington provides health coverage to about 540,000 children from low-income families. Savings: $40 million if you drop income eligibility from its current level — $45,000 for a family of four — down to $32,000. Beat it, kid: Would immediately bump about 40,000 children off Medicaid.		$40 M
A little actuarial adjustment The governor has proposed a new method of calculating the state's share of government employee pension funds. Savings: $110 million Free money: This is an accounting tweak, not a real cut. So take it.		$110 M
		COLUMN TWO SUBTOTAL
Budget-cut grab bag
		COLUMN THREE
Stop reimbursing hospitals for acute care to the uninsured. $82 million.		$82 M
Eliminate program that provides cash to unemployable poor adults: $44 million.		$44 M
Consolidate prescription-drug purchasing by major state agencies: $23 million.		$23 M
Reduce nursing home reimbursement rates by about 7 percent: $34 million.		$34 M
Eliminate funding for crisis shelters for runaway teens: $17 million.		$17 M
Eliminate funding for the Treatment Alternatives to Street Crime program: $7 million.		$7 M
Halt Medicaid prenatal care for undocumented immigrants: $50 million.		$50 M
Cut spending on goods and services — from paper clips to printing — by one-fourth: $200 million.		$200 M
Eliminate the Washington Council for the Prevention of Child Abuse and Neglect: $1.3 million.		$1.3 M
Close the State Film Office, which tries to woo Hollywood producers to Washington: $879,000.		$879,000
Halt funding for anti-bullying/harassment training in schools: $486,000.		$486,000
Eliminate education funding for the Pacific Science Center, the Cispus environmental camp, the LASER science program: $4.8 million.		$4.8 M
End state support for the Sexual Abstinence Program: $388,000.		$388,000
Eliminate funding for tourism marketing: $8.2 million.		$8.2 M
Halt state library services to the Legislature and state agencies: $4 million.		$4 M
Eliminate consumer-protection enforcement: $6.9 million.		$6.9 M
Halt Department of Health food-safety/shellfish-protection program: $6.5 million.		$6.5 M
Close Naselle, Coulter Creek and Hurd Creek fish hatcheries $800,000.		$800,000
Cut marketing of state parks: $218,000.		$218,000
Eliminate tobacco tax-enforcement program: $2.6 million.		$2.6 M
End state Capitol campus tours: $616,000.		$616,000
Eliminate Washington Conservation Corps.: $390,000.		$390,000
Halt state air- and water-quality programs: $50 million.		$50 M
Cut funding for eradication of noxious weeds: $2.6 million.		$2.6 M
Eliminate state-parks winter recreation program $158,000.		$158,000
Eliminate funding for geology public-information program: $830,000.		$830,000
Reduce spending on personal bodyguards for the governor and lieutenant governor by 50 percent: $1.3 million.		$1.3 M
Eliminate public-emergency information system: $250,000.		$250,000
Cut Assistance to Innovative Businesses program: $5.7 million.		$5.7 M
Halt state assistance for local economic development: $7.4 million.		$7.4 M
Eliminate international agriculture marketing: $1.7 million.		$1.7 M
Cut low-income weatherization assistance: $3.3 million .		$3.3 M
Eliminate state archeology and historic-preservation program: $1.3 million.		$1.3 M
Eliminate funding for child fatality reviews: $1 million.		$1 M
		COLUMN THREE SUBTOTAL
COL. TWO SUBTOTAL COL. THREE SUBTOTAL TOTAL BUDGET CUTS
Raising Revenue Can't do it on cuts alone? Well, your only other option is to find more money. Here are some things you could do to boost income, including a smorgasbord of tax ideas. If you'd like, don't call them taxes. Call them "revenue enhancements," as they do in Olympia. There, doesn't that feel better? Turning to taxes
		COLUMN FOUR
The $6 billion tax The backbone of the budget, Washington's 6.5 percent sales tax raises nearly $6 billion a year. The sales tax hasn't been increased since the early 1980s, but some people want a temporary bump. How high can you go? Increasing the sales to 6.6 percent would raise $176 million over the next two years. Go to 7 percent, you get $876 million. Need more? A 7.5 percent tax will raise $1.7 billion.		$176 M (raise sales tax to 6.6%) $876 M (raise sales tax to 7%) $1.7 B (raise sales tax to 7.5%) $0 (keep sales tax at 6.5%)
Bread-and-butter tax? Since the late 1970s, food purchases have been exempt from sales taxes. In the early 1980s, the Legislature lifted the exemption for 14 months to help close a budget crisis comparable to this one. Bring in the bacon: Lifting the exemption on food purchases for two years would raise nearly $1.4 billion. The road to regressive: Keep in mind, the sales tax is already criticized as unfair because poor people are forced to pay as much tax on a loaf of bread as the rich.		$1.4 B
A bigger bite out of business? The business-and-occupation (B&O) tax, the state's second largest source of income, will bring in more than $4 billion over the next two years. Do the B&O bump: A 10-percent surtax on all rates would raise $410 million. A 25-percent surtax would raise about $1 billion. Warning: Tax hikes during an economic downturn are risky business.		$410 M $1 B $0
Building a bigger levy Also known as the "school levy," the state property tax – about $2.60 on every $1,000 in property value – will raise about $2.5 billion over the next two years. Under state law, the highest you can go on the property tax is $3.60 per $1,000. Up a quarter: Increasing the levy by 25 cents would raise nearly $250 million. A $1 bump gets you nearly $1 billion. Not so fast: This is already our most-hated tax. And any increase would require a two-thirds vote of the Legislature or approval from the voters.		$250 M $1 B $0
Think the unthinkable Unlike almost every other state, Washington has no personal-income tax. There have been several futile attempts in decades past to impose one. Quick fix: A 1 percent personal-income tax would raise nearly $2.4 billion in the next two years. Why bother? You'd have to convince an anti-tax electorate to amend the Constitution.		$2.4 B
		COLUMN FOUR SUBTOTAL
Tax increase grab bag
		COLUMN FIVE
5-cent tax per 12-ounce soft drink: $272 million.		$272 M
Extend existing sales tax to haircuts and beauty services: $49 million.		$49 M
10 percent tax on cardrooms: $61 million.		$61 M
2 percent sales tax on sporting goods: $57 million.		$57 M
Increase liquor tax $1 per liter: $58 million.		$58 M
Extend sales tax to golf and bowling lessons: $5.5 million.		$5.5 M
Extend sales tax to dance studios: $2.5 million.		$2.5 M
1 percent tax on admission to movies, concerts and sporting events: $12 million.		$12 M
Extend sales tax to bakery products: $54 million .		$54 M
50-cent increase in cigarette tax: $81 million.		$81 M
Extend sales tax to cable television: $60 million.		$60 M
		COLUMN FIVE SUBTOTAL
Hitting the brakes on tax breaks We forgo billions each year through tax exemptions. There are more than 430 separate tax breaks on the books, covering everything from hops and bubble gum to prescription drugs and high-tech manufacturing equipment. Lawmakers handed out more than 100 new tax breaks during the booming 1990s.
		COLUMN SIX
A handful of tax breaks—including ones aimed at bolstering high-tech research and development—are scheduled to sunset soon. Letting them die would generate an extra $100 million over the next two years. Some other exemptions you might want to reconsider:		$100 M
Sales tax on manufacturing equipment: $293 million .		$293 M
Sales tax on newspapers: $6.4 million.		$6.4 M
Sales tax on prescription drugs: $443 million.		$443 M