Gov. Gregoire Announces Plans for $260 Million in Additional Budget Savings

Actions Will Put Current Budget Back Into the Black

OLYMPIA – Gov. Chris Gregoire today announced spending reductions that will save $260 million in the current budget, putting the budget in the black for the biennium that ends June 30, 2009.

Agencies are being asked to further cut their remaining Fiscal Year 2009 General Fund spending, with some exemptions for revenue-creating activities and other legal obligations. These savings will combine with the $330 million being saved through freezes on hiring, out-of-state travel, personal service contracts and equipment purchases, as well as across-the-board cuts previously directed by the governor.

“Our state is collecting less revenue due to continued national financial turmoil,” Gregoire said. “We must act now to reduce our spending and put our budget back in the black without touching the Rainy Day Fund.”

The governor noted that 40 other states are in or facing deficits in the coming budget cycle.

Gregoire and her budget staff are now preparing a budget proposal for the next biennium, which runs from July 1, 2009, to June 30, 2011. The governor’s budget must be submitted by Dec. 20, 2008.

“The fact is, our challenge has only begun. The magnitude of this crisis is unprecedented in recent times, forcing us into unchartered territory to develop solutions,” Gregoire said. “Closing the projected budget shortfall will require great sacrifice on the part of all Washingtonians during these tough economic times. Families and businesses across the state are making sacrifices to weather the economic crisis, and state government will have to make sacrifices, too.”

The governor has called for a second federal economic stimulus package that puts people to work on ready-to-go public works projects, extends unemployment benefits, and boosts food stamps and health care services. Earlier this month, the governor expedited the release of $300 million in federal funds to help stimulate the state’s economy through relief to distressed fishing communities and through assistance to low-income households to help pay energy bills and provide home weatherization jobs.

“Next week, my fellow governors and I meet with President-elect Obama, and we will continue advocating my proposal to get Americans to work and fix our nation’s aging infrastructure,” Gregoire said. “We are facing one of the biggest challenges since the Great Depression. Our challenge is to find opportunity in this adversity to institute changes that will make us stronger.”