OLYMPIA, Wash. - Gov. Chris Gregoire's budget office says higher costs for government services have driven the state's projected budget shortfall to about $2 billion.
And that's not all: The deficit is likely to grow even larger next week, when state economists issue a new forecast of expected tax income for the current budget period which runs through mid-2011.
Majority Democrats already were forced to reduce spending on many of their priorities last session, en route to fixing a $9 billion budget shortfall. But the deficit has grown, and officials are starting to warn there's not much room left to absorb spending cuts.
Gregoire and top lawmakers also have put tax hikes on the table -- a sharp change in tone from earlier this year, when the newly re-elected governor tamped down any discussion of tax increases.
The Statehouse's minority Republicans still see room for savings through a major restructuring of how the state delivers services. The GOP also says the Legislature should make those moneysaving moves quickly, rather than spending money for months on programs that will eventually have to be cut.
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