Governor Orders Additional State Budget Cuts

The memo you knew was coming arrived today. OFM director Victor Moore calls on elected officials, agency directors, and other top state administrators to cut an additional $260 million from their current budgets. The memo includes specific targets and lays out criteria the budget-cutters should use.

1. Identify and take under-expenditures and efficiencies that go beyond those already taken;
2. Continue to pull back on new programs not yet fully implemented; and
3. Scale back existing programs and activities that fall lower in the Priorities of Government
process and/or have been identified in your work with OFM as 2009-11 Biennial Budget
reduction items. 

Stories by Rich Roesler and the Associated Press.

Roesler also has a good article on how state workers see things.

The largest state workers union, the Washington Federation of State Employees, argues against job cuts. It represents about 40,000 of the state's more than 100,000 employees.

"We believe, as some economists believe, that the worst thing to do during an economic downturn is to lay off, especially public employees," said Tim Welch, the union's spokesman. Demand for state services rises in tough times, he said.

Welch prefers to see tax exemptions repealed. And, as Roesler notes, he has an important ally.

Some lawmakers, notably Senate Majority Leader Lisa Brown, D-Spokane, make a similar argument.

"I think we will absolutely be looking at current tax breaks," she said.

There's already a system in place for evaluating tax exemptions. And, if preserving consumer spending during a recession, an argument Welch makes, it's much more important to create a strong investment climate. Tax incentives that spur capital investment by private firms play a critical role in assuring job creation in Washington. AWB president Don Brunell and I discuss one of those incentives here.

It's also important not to overdramatize the state's fiscal challenge. As the Seattle Times editorialized Sunday, it's possible - not easy - to balance the budget within current revenues. The Times offered a list of $5 billion in savings.

The Olympian also editorialized Sunday on the "bloodletting."

Echoing WashACE's education priorities, the Thicket at State Legislature's blog, has a good podcast on STEM programs.

Within current revenues, it's critical that lawmakers preserve the investments that spur economic growth, including tax incentives.