Gov. Jay Inslee has announced tens of millions of dollars in state budget cuts — including the elimination of planned raises and a reduction of hours among some state employees — as part of his efforts to rein in spending as a recent revenue forecast painted a picture of losses approaching $9 billion in the next few years due to the effects of the COVID-19 pandemic and associated business disruptions.
He also said it’s too soon to call a special session to address the revenue shortage as lawmakers have not come to an agreement on how to approach it.
Inslee spoke about the cuts during a press conference Wednesday, June 17, which followed the release of the Washington State Economic and Revenue Forecast Council’s June report earlier that day. The report showed a nearly $4.5 billion drop in revenue this biennium, with an additional $4.3 billion reduced in the next biennium, as a result of a stifled economy in the face of the global pandemic.
The cuts announced that day included the furlough of about 40,000 state employees, requiring them to take one day of the week off without pay for a month starting June 26, as well as canceling previously approved raises of 3 percent for some 5,600 state workers. Inslee said those measures would save about $55 million, adding that should other government entities not under control of his office make similar cuts, an additional $91 million could be saved.
The cuts announced were only the most recent ways Inslee has addressed a poor economic forecast, as he noted he had previously vetoed close to $450 million in appropriations in April and asked state agencies to model 15-percent budget cuts to realize more savings.
“We’ve got to scrub the whole budget and see what the budget’s going to look like from the expenditures side,” he said, acknowledging difficult decisions ahead on cutting down spending.
“That’s not easy, but it’s necessary,” Inslee said about the cuts he announced and the ones to follow.
Inslee said some agencies would be unaffected by the furloughs, notably employees processing unemployment insurance claims and some workers of the state Department of Health.
With calls for a special session to address financial issues at the state level, Inslee said that there would need to be a clear direction on how to proceed in acting on solutions, something he didn’t feel was the case as of the press conference.
“When we have some consensus of people around a proposal, then we can call a special session if it is appropriate,” Inslee said.
Another factor was determining what federal help would be rendered to Washington, Inslee said, calling the approach of the U.S. Senate under Mitch McConnell as “(letting) the states go bankrupt.” Federal assistance, should it be rendered, would play into what sorts of state-level cuts would be necessary.
Inslee said that about two-thirds of the state’s budget was “walled off” from the ability to make cuts, with the governor saying much of the remaining third dealt with “people who are most in need.” The governor said he was hopeful that Congress would aid the state to prevent potentially “draconian” cuts where Washington was allowed to do so.
Inslee said the $3 billion in state reserves allowed for some time before making decisions on future cuts “to some degree,” adding that the reduction announced that day was “the largest potential cut that anybody has discussed.”
Inslee said the pay cuts for state employees was the only measure he has seen put forth by critics to handle the forecasted revenue decline, explaining they were actions that could be taken “today,” rather than speculation on potential revenue sources from taxes.
“What I have found is critics are quite courageous at talking about invisible cuts, but not really stepping forward on them,” Inslee said.
The governor responded to one critic, Republican Sen. John Braun, of Centralia, who told the media earlier that day he believed the 15-percent budget cut exercise was a tactic to persuade exploration in additional revenue. Inslee took issue with the criticism, noting that Braun had spoken out against looking at potential revenue increases through taxation, now appearing to also not be in favor of cutting expenditures.
“I think Sen. Braun, with all due respect, needs to figure out which horse he wants to ride,” Inslee said.