OLYMPIA, Wash. -- Washington state's budget crisis is leading to a new round of across-the-board cuts for the 2011-13 biennium.
On Thursday, Gov. Chris Gregoire discussed the state's deepening deficit and announced she's cutting $51 million from state welfare programs, and said across-the-board cuts to other state programs are likely in October.
Gregoire said she's told state agencies to prepare for cuts of 4 to 7 percent effective Oct. 1. She'll know firmer numbers after the state's updated revenue forecast in September.
"Let me give you an idea of what a 4 percent across the board cut would mean," said Gregoire. "It would mean for the department of revenue laying off approximately 40 personnel. In turn we estimate that would mean a loss of about $15 million in revenue to the state. The Department of Corrections would have to look yet at another prison closure, most likely Larch Corrections Center. Hospice services would be eliminated."
Over the last two months, revenue collections have been $125 million below expected amounts. The state's fund balance went from $453 million down to $72 million for the 2009-11 biennium.
Gregoire said this would have actually been in the red if Congress had not stepped forward last week with Federal Medical Assistance Percentage (FMAP) funding to the states for welfare, but that was still $142 million less what the state was counting on.
Gregoire's proposal slashes spending for the welfare to work program known as Workfirst by $51 million. The immediate cuts to welfare programs come mostly through decreasing the number of people eligible for the program and its services, including child care subsidies.
"Fewer families will qualify for help with their child care bills. Fewer families will qualify for an extension of benefits. Emergency funding to help families with utility bills and funds to help them find a job will be reduced," said Gregoire.
Gregoire added that even with federal money approved to the state this week, the state's reserves have dwindled to $72 million.
Gregoire is concerned the amount of money the state is taking in on things like sales tax will be even lower in September. That's why she's asking state agencies to start drafting plans for another round of cuts, requesting those plans on her desk by October 1st.
KING 5's Glenn Farley contributed to this report.
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