Governor proposes 2010 supplemental budget

On December 9, Gov. Chris Gregoire proposed a 2010 supplemental state budget, which would fill a $2.6 billion hole in the budget for 2009–11 through service eliminations, reductions or suspensions and use of $900 million of the state rainy day fund and other reserves. As required by law, she submitted a budget based on currently available revenue.

Among the programs targeted for elimination are the state Basic Health Plan, which provides health care coverage to nearly 65,000 individuals ($160 million); Apple Health for children, which provides health care coverage to 16,000 low-income children ($11 million); and the General Assistance Unemployable program, which provides cash grants for 23,000 adults and medical services to nearly 17,000 adults ($188 million).

The Governor made it very clear that she does not support this budget. She plans on introducing a second budget in early January, which will restore several of the most critical programs that would be eliminated by the all-cuts budget.

The Governor preserved state-shared revenues allocated to cities and counties in this version of the budget. We will continue to work to save these critical resources for cities and towns.

The Governor also stated that she is supportive of enhanced flexibility for local governments. Specifically, she said we need to help local governments help themselves.

Our initial review of the 2010 supplemental budget includes the following:

• Municipal Criminal Justice Assistance Account – No change.
• Streamlined Sales Tax Mitigation – $10 million transferred to the general fund; however it appears that this represents the excess balance and will not impact distributions to cities and others. $53.4 million is appropriated to this account.
• City-County Assistance Account – Continued appropriation to the City-County Assistance Account, $28.56 million initially allocated in 2009-11; $25.55 million is proposed in 2010 budget. Difference due to revenue forecast.
• General Assistance Unemployable Program – Eliminated the General Assistance Unemployable program. General Assistance grants will continue for individuals with pending applications for federal Supplemental Security Income. General Assistance grants will also continue for recipients of the General Assistance Aged, Blind and Disabled programs ($88.5 million cut). Eliminate General Assistance Unemployable Medical Service program, which provides healthcare to approximately 20,000 individuals ($118.9 million loss).
• Public Works Assistance Account – The Legislature swept $368 million from the fund in 2009. The Governor is proposing an additional $41 million be allocated to the General Fund from this account. It appears these are funds collected above those anticipated and swapping Public Works funds for State Construction funds on previously appropriated projects - the existing projects remain funded.
• Transportation Improvement Board, Freight Mobility Strategic Investment Board, County Road Administration Board – Funds from the respective state agencies are transferred to WSDOT-Highways and Local Programs Division. The funds cannot be fully released until a reorganization plan has been approved by the Office of Financial Management, and after the House of Representatives and Senate has been notified. Our understanding is that this proposed consolidation does not change the Boards for the respective agencies.
• Local Toxics Control Account – $45.2 million of the Local Toxics Control Account are transferred to the state general fund. $36.6 million of the State Toxics Control Account is transferred to the state general fund.
• Growth Management Assistance – Grants to local governments to develop growth management plans are eliminated. Legislation will be proposed to extend the local growth management plan update cycle time frame.
• Basic Law Enforcement Academy – Reduces the number of Basic Law Enforcement Academy classes because law enforcement agencies are not hiring due to the recession. The Criminal Justice Training Commission is funded for 13 classes in Fiscal Year 2010 and 16 classes in Fiscal Year 2011 ($1.6 million cut).

To see more specifics, click here (pdf, 24 kb). Over the next few days we will be refining our review of the budget. Please check our website frequently for updates.

The Governor indicated her January budget that will include additional revenue, approximately $700 million, intended to buy back the following programs:

• Basic Health and Apple Health plans;
• General assistance program for the most needy;
• Levy equalization funds for public schools;
• State financial aid to allow more students to attend higher education;
• Early childhood education money;
• Adult medical, dental, vision and hospice programs; and
• Developmental disability and long-term care provider funds.

This second budget, with revenue enhancements, will still cut $1billion in state expenditures.

The Governor acknowledged that it could be several years before the state regains a solid economic footing. She anticipates that the biennial budget she will propose next year for the 2011-13 biennium will be as difficult as this year’s supplemental budget.

Links to 2010 supplemental budgets and information:

• Governor’s budget highlights
• Gov. Gregoire's Proposed 2010 Supplemental Budget
• Governor’s press release on supplemental budget
• News conference: Governor’s Proposed 2010 Supplemental Budget
• Governor’s letter to Washingtonians

This 60-day session will be fast and furious. Please contact your legislators and let them know how important state-shared revenues are to your city or town. Remind them that you also are experiencing budget difficulties and have made difficult cuts impacting key programs and services. Continued state assistance is critical and so are local tools and flexibility to allow you as city officials to work with your citizens to provide the services they need and expect.

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