National economic woes hit home

As many of us peer at our own household budgets, looking for something to cut, Governor Gregoire will also be taking a closer look at the 2009 state budget. A new forecast shows Washington State might face a $3.2 billion shortfall. It makes our own problems look a little smaller, doesn't it?

This shortfall means that instead of receiving $5.6 billion in revenue next year, the state of Washington will receive only $2.4 billion.

As reported in the Olympian, interim revenue forecaster Steve Lerch says:

(This) leaves the state with a surplus for the ongoing budget, but state Senate budget experts said the new forecast could leave the state $3.2 billion short of revenue needs for the budget period beginning July 1, 2009, if programs are carried forward at current levels including inflation, pay increases for teachers and state workers, and other status-quo funding.

In response, Gregoire has asked the Office of Financial Management to find $200 million in savings in addition to the $90 million that the governor cut last month with a hiring freeze and fuel-use and travel reductions.

In her own words:

The national economic slowdown is clearly affecting Washington's economy," Gregoire said in a statement released after the forecast. "We anticipated this decrease, and we are better prepared to weather this storm because of fiscally responsible initiatives such as the Rainy Day Fund and adjustments to spending over the past few months.

It didn't take long for the governor's opponent Dino Rossi to show his own McCainesque grasp of the economy:

It's wrong to blame this deficit on the national economy. We already had a projected deficit in excess of $2 billion long before the recent bad economic news.

Not sure which rock Dino's been living under, but bad economic news has been "recent" for over a year. The subprime mortgage crisis began before Rossi started running for governor. Maybe he just hasn't been paying attention.

Although Washington is located in a far, pristine corner of the United States, we are affected by problems caused by Wall Street and the Bush administration.

The problems facing the national economy over the past year: the rising cost of fuel and food, the decrease in home values, and the increase in foreclosures, have been accumulating here at home too.

We're not alone--thirty-one other states are facing a budget deficit in 2009 too.

State Senator Joseph Zarelli, a Republican, doesn't understand why Gregoire hasn't taken his budget-slashing suggestions such as not implementing family leave, an earned income tax credit for the working poor or expanded all-day kindergarten.

She is avoiding these "remedies" because they primarily hurt lower and middle class families and don't provide long term savings.

Revenue neutral tax credits for the working poor pump money into the economy, and expanding all-day kindergarten is an investment in early childhood education that reaps dividends double the state's investment.

If we lose sight of our values in every economic downturn then we cannot expect to be a state with strong families and a strong middle class.

I have faith that Governor Gregoire, who values education and wellness of our children, will remember her values when she takes out her red pen and starts chipping away at Washington's budget.