By: Sen. Jeanne Kohl-Welles

Dear Neighbors,

Last Friday we completed Week 10 of this year’s Legislative session. As Senate committees review House bills and House committees review Senate bill, we are also working to balance our budget.

Operating budget shortfall grows to $9 billion

The state’s Revenue Forecast Council released a new projection of tax collections last week that made the state’s budget hole even wider.

With the national economy continuing to sour, the Council projects tax collections will drop by $552 million over the next 28 months. Weak housing and auto sales have spread to other segments of our economy such as manufacturing, aerospace, software publishing, and retail sales.

Data suggest economic growth will remain stagnant in the first six months of 2010 and could improve in the second half of the year. Unfortunately, job losses are expected to continue even after our economy recovers.

Also, and very unfortunately, our state’s unemployment rate jumped to 8.4 percent in February, up from 7.8 percent in January. An estimated 330,572 people in our state are now out of work. In February we lost 28,200 non-agricultural jobs. Professional and business service sector is down 13,400 jobs, the construction industry is down 4,200 jobs and manufacturing has cut 2,500 jobs.

All this has pushed the state’s unprecedented budget shortfall to about $9 billion. Senate leaders believe this will force them to accept many of the cuts Gov. Chris Gregoire proposed in her budget plan and then cut more than 60 percent deeper.

This will force lawmakers to cut budgets directly into the bone of core state services. Virtually every functional area of the budget that can legally be cut will be. That includes major cuts in education and higher education, health care and services for the vulnerable.

The revenue forecast is the last major piece to the budget puzzle lawmakers need to craft their own proposals. The Senate’s version will likely be announced next Monday. The House is expected to release its plan shortly thereafter.

You can watch a video of Senate Ways and Means Committee Chairwoman Margarita Prentice, D-Renton, discussing the budget situation here. Committee vice-chair Rodney Tom, D-Medina, held court with reporters after last week’s revenue forecast; you can watch the exchange here.

Our budgets

This shortfall creates an unprecedented budget crisis that makes deep cuts unavoidable. We are working, the best we can, on an operating budget that maintains Washington’s values and fund what we find most important, such as funding for education, health care and a safety net for our most vulnerable.

When our budget is released, it likely will be an all-cuts budget. This is something I cannot support. But I will work with leadership to present a tax package to the voters who can decide for themselves if they are willing to pay a small amount more in targeted taxes to maintain crucial programs. I strongly believe that it would be counterproductive, resulting in “unintended consequences,” to do otherwise. The capital, or construction, budget also will be released on Monday. The two-year transportation budget is being released today: you can read an overview on it here.

I’ll keep you posted on our budget developments through these e-newsletters but don’t hesitate to contact me with any concerns you may have. I’ll also provide updates on the progress of important legislation.

Retro reform

I’ve written you before about my desire to bring transparency to a very important worker safety and workers’ compensation program called Retro. Monday, The Seattle Times published an opinion editorial, co-authored by myself, on the bill; you can read the op-ed here.

Warmly,

Sen. Jeanne Kohl-Welles